Oceana Gold shares dip with gold prices

Shares in Oceana Gold have plunged 13% in recent days, reflecting an unusual downturn in the spot prices of gold globally during the past week.

Gold, historically a safe haven in troubled times such as those faced at present by many of the European Union countries and the US, has declined 7.5%, from $US1754 to $US1622 ($NZ2319 to $NZ2145) during the past week.

Craigs Investment Partners broker Peter McIntyre said gold was characteristically seen as a safe-haven asset to buy in bad economic climates; having hit an all-time high of $US1921 in early September amid global turmoil.

"It is unusual that gold prices have fallen, given the bout of bad news from data out of the US and what's happening in Europe," he said yesterday.

Shares in Oceana fell 12.75% from $3.38 to $2.95 yesterday.

Those in Newcrest were similarly down more than 10% over the same period and trading yesterday at $A32.29 ($NZ42.72).

Mr McIntyre said with gold near $US1700 recently, many investors would have touched on "technical" selling levels, where they had predetermined, automatic sale orders in place in order to take profits. He expected gold to trend in a range of $US1600 to $US1800 during the next three to six months.

The next "breakout" by gold is expected to come from following the next tranche of quantitative easing in the United States, where more cash is pumped into the lacklustre economy, which weakens the US dollar.

"That [weakening] becomes a natural supporter for increasing the price of gold," Mr McIntyre said.

simon.hartley@odt.co.nz

 

 

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