Gold shares surged higher Monday morning alongside the price of gold and broader equity markets, as the AMEX Gold Bugs Index (HUI) jumped 3.4% to 546.10.
COMEX gold futures reached an intra-day high of $1,724.90 per ounce earlier this morning and remained up by $26.60, or 1.6%, at $1,715.10 as of 11:53am ET.
The S&P 500 Index advanced 3.1% to 1,194.87 as a better than expected report on Black Friday retail sales in the U.S. joined forces with renewed hopes for a more robust bailout package in Europe to send stocks and commodities higher across the board.
Several of the world’s largest gold producers posted significant gains, with Goldcorp (GG) up 3.9% at $49.68 per share and Kinross Gold (KGC) climbing 3.5% to $13.19 per share.
Two notable laggards, however, were Agnico-Eagle Mines (AEM) and Randgold Resources (GOLD).
Agnico-Eagle initially rose as much as 2.9% to $42.71, but surrendered its entire gain later this morning and traded down by $0.09 at $41.43 per share. The catalyst for AEM’s poor performance was a downgrade from Canaccord Genuity, which lowered its rating on the Canadian-based gold miner from Buy to Hold and cut its price target to $53.00 from $98.00 per share. The firm cited the suspension of production at the Company’s Goldex Mine, its recent acquisition of Grayd Resource Corp, and higher capital costs as factors impacting the downgrade.
Randgold Resources fared far worse than Agnico-Eagle today, however, after the Company lowered its full-year consolidated gold production forecast to 690,000 – 700,000 ounces from 740,000 – 760,000. Randgold cited “a series of setbacks” at its Tongon mine in Côte d’Ivoire as the primary reason for the guidance reduction. GOLD tumbled $7.12, or 6.9%, to $96.76 per share this morning.
Alacer Gold’s Production Climbs, Raises Forecast
Alacer also noted that its Çöpler gold mine in Turkey continues to exceed the Company’s expectations, with production of 53,200 ounces for the quarter and cash operating costs decreasing by $126 per ounce to $259 per ounce. To date, the mined grade of the “world-class orebody has been significantly more than modeled,” with mined grade rising quarter over quarter by 66% to 2.07 grams per tonne of gold. Read the Full Press Release.
