Base metals leave golds behind

U.S. stock markets were quiet during the report period Dec. 15-21, rising only slightly. The Dow Jones Industrial Average rose 82.98 points to 10,759.43.

Even with a modest (US$3.25) increase in the gold price, the golds mainly fell back. Newmont Mining, always a reliable indicator of the sector, was down US22 at US$45.45, and AngloGold Ashanti was off US4 at US$36.64.

Negotiations between Gold Fields and Harmony Gold Mining, facilitated by major Gold Fields shareholder Norilsk Nickel, were held in Moscow during the week under review, with the two principals stating that a mutually agreeable deal might be reached for a merger. It was generally assumed that Harmony would have to pay more than its current 1.275-share paper exchange for Gold Fields, though not as much as Gold Fields was trading at in the open market. Gold Fields, logically, fell US22 to US$12.75, but Harmony, less logically, rose US8 to US$9.40. Norilsk shares were up US$5.35 at US$51.

Two mid-tier golds that bucked the general downward trend were Compania de Minas Buenaventura, up US43 to US$22.98, and Lihir Gold, which closed US51 higher at US$18.08.

Base metals producers had a much better week than the gold miners. Phelps Dodge rose US$5.53 to US$99.97. Rio Tinto was up US$2.92 at US$11.12, BHP Billiton added US$1.03 to finish at US$23.91, and Freeport-McMoRan Copper & Gold picked up US$1.03 too, closing at US$38.15.