Gold shares moved higher on Friday amid a modest decline in the U.S. dollar and a broad-based rally on Wall Street.
The AMEX Gold Bugs Index (HUI) – comprised of many of the world’s largest gold producers – rose 0.8% to 560.46 in mid-day trading.
Gold futures posted considerably smaller gains than gold equities, however, as the COMEX February 2012 contract inched higher by just $3.10, or 0.2% to $1,716.50 per ounce.
One of the top performing gold stocks in the HUI was IAMGOLD (IAG), which jumped 2.2% to $19.26 per share after the Canadian-based company announced a 25% increase in its annual dividend to $0.25 from $0.20 per share. TD Securities analyst Steven Green wrote in a report to clients that “This represents a yield of 1.3 % and puts it in-line with its mid/large cap peer average (range of 0.8% – 2.1%)…With strong cash flow and over $1 billion in cash the company can easily afford this boost.”
Other notable advancers included Eldorado Gold (EGO), Kinross Gold (KGC), and Randgold Resources (GOLD). EGO rose by 0.6% to $16.32 per share, KGC by 1.2% to $13.33 per share, and GOLD by 0.4% to $107.10 per share.
The broader markets outperformed the gold sector as a whole, with the Dow Jones Industrial Average up 1.3% at 12,156.11 and the S&P 500 Index higher by 1.4% to 1,251.79. Equities responded favorably to the European Union summit, where officials agreed to closer fiscal ties and additional measures to tackle the ongoing sovereign debt crisis.
Premier Gold Expands High-Grade Zones at Trans-Canada Project
- Four zones are currently being drilled including the HGN, F2, North Shear and Key Lake (West Extension)
- The HGN and F2 zones are located proximal to the historic mine workings and remain open both up and down plunge
- The North Shear is a new discovery located between the Hardrock and Little Long Lac Mines and the West Extension target is a high grade target along strike from the Key Lake deposit that was acquired through Premier's acquisition of Goldstone Resources earlier in 2011
- These zones have characteristics similar to the high-grade past producing Little Long Lac (600,000 ounces gold produced at a grade of 11.7 grams per tonne) and Leitch (847,900 ounces produced at a grade of 31.5 grams per tonne) Gold Mines that are located on the Trans-Canada Project
