JOHANNESBURG: South African bullion producers such as Harmony Gold remained under pressure on Tuesday, weighing on the wider market which ended in the red, after the precious metal fell to a nine-month low in the face of relentless dollar gains.
The benchmark Top-40 index slipped 0.11 percent on the day and has lost almost 4 percent this quarter, the biggest fall since the same period in 2011 when it fell more than 7 percent, pushing it further back from record peaks hit in July.
But the market could be in for a technical bounce as the Top-40's 14-day RSI - a momentum indicator tracked by chartists - has strayed into oversold territory. This helped the index pull back from deeper losses earlier in the session.
Africa's top gold producer AngloGold Ashanti lost 0.37 percent but came off troughs reached earlier in the day.
Rival Harmony Gold shed 2.33 percent to 24.70 rand while Gold Fields ended 2.35 percent lower.
Sibanye Gold bucked the trend, adding 4.75 percent, after it said Van Eck Associates Corporation, an asset manager, had raised its stake in the company to over 5 percent.
This is a sign of confidence in a gold producer which has positioned itself as a dividend play because it is mining mature assets that generate cash.
But the overall picture for bullion is gloomy.
Spot gold touched its lowest since Jan. 1 at $1,204.40 an ounce and is on track for a quarterly loss of 9 percent, hit by expectations that the dollar will rise in tandem with U.S. interest rates.
"Gold bulls' worst nightmares involve a rampant dollar and surging real interest rates," Macquarie analyst Matthew Turner said.
The benchmark Top-40 index lost 0.11 percent to 44,160 while the wider All-share index shed 0.07 percent to 49,336.
Comments
Comments are closed.