GOLD PRICE NEWS – The gold price dropped on Friday to a two-week low as precious metals were unable to rebound from yesterday’s sell-off. This morning, the spot price of gold fell by as much as $13.07, or 0.8%, to $1,655.03 per ounce – its lowest level since January 11th. The SPDR Gold Trust (GLD), the world’s most liquid gold price proxy, slid by $1.11, or 0.7%, to an intra-day low of $160.31 per share. Today’s weakness in gold prices came despite a modest drop in the U.S. Dollar Index (DXY), which dipped by 0.3% to 79.709.
Silver retreated alongside the price of gold, by as much as $0.55, or 1.7%, to $31.16 per ounce. Gold’s sister precious metal subsequently pared its losses, however, as it bounced back to near the $31.45 level. As a result, silver cut its weekly decline to 1.3% and remains up by 3.5% thus far in 2013.
Gold stocks continued to struggle in concert with the yellow metal, as the Market Vectors Gold Miners ETF (GDX) tumbled by as much as $1.32, or 3.1% to $41.91 per share. With the slide, the gold stocks ETF reached its lowest level since July 26th of last year and extended its year-to-date loss to 6.8%.
Notable gold stocks in the red this morning included GDX components Agnico-Eagle Mines (AEM), Eldorado Gold (EGO), and Kinross Gold (KGC). Shares of AEM fell by 3.9% to $45.72, EGO by 4.4% to $11.64, and KGC by 4.6% to $8.57.
In contrast to the gold sector, the broader equity markets continued to march higher. The S&P 500 Index – which yesterday surpassed the 1,500 mark for the first time since December 2007, before paring its gains – traded up by 0.5% to an intra-day high of 1,502.26.
As for the gold price, today’s sell-off extended the yellow metal’s weekly loss to 2.0% and its year-to-date decline to 1.1%. Despite the weakness, many strategists remain constructive on the outlook for gold prices moving forward. UBS analyst Joni Teves wrote in her latest note to clients that “There is still much uncertainty ahead and many hurdles to clear before one can claim that U.S. economic growth is trudging along a robust, sustainable path.”
She went on to say that “Accommodative policy is still expected to remain in place for some time, a scenario that continues to be conducive for higher gold prices. And in that sense, the recent pullback should be viewed as an opportunity to pick up metal at more attractive levels.”
Aurizon Mines’ Board Unanimously Recommends Rejecting Alamos Offer
Aurizon noted that the Alamos offer, based on the closing price of Alamos on January 22, 2013, represented a value of C$4.55 per Share assuming full pro-ration of the Alamos Offer consideration; this is a 4.1% discount to the closing price of Aurizon's shares on the same day and a 21% discount to the 52-week high share price of Aurizon. The Company also pointed out that the C$4.65 price has never been available to Aurizon shareholders, based on the implied offer value, since the Alamos offer announcement was made. Based on the current Alamos offer value of C$4.55 per share, the effective premium to Aurizon shareholders has eroded 4% relative to the closing price of the Aurizon Shares on January 11, 2013 – the last trading day prior to the Alamos offer announcement. Full Aurizon Mines Press Release.
- The Board's recommendation is based in part on the recommendation of the Special Committee and the advice from financial advisors to Aurizon and the Special Committee and follows a thorough review process, undertaken in consultation with its financial and legal advisors
- The Board noted that it has serious concerns about unequal treatment of Aurizon shareholders as a result of Alamos having entered into private share purchase agreements with certain shareholders of Aurizon immediately prior to the commencement of the Alamos Offer
- The Board intends to seek shareholder ratification of a shareholder rights plan at a special meeting of shareholders on March 7, 2013 in order to provide the Board with adequate time and measures to respond to unsolicited takeover bids
