Resource stocks bounced back on U.S. markets after last week’s “mini-correction” aimed mostly at coal and energy companies. Strong gold prices drove the rally over the report period Nov. 15-21, with both the Dow Jones Industrial Average and the broad-based S&P 500 posting respectable gains. DJIA climbed 123.11 points to close at 10,820.28, while the S&P gained 21.09 points to close at 1,254.85.
With gold prices on the rise, it’s no surprise Newmont Mining was the most actively traded gold stock over the trading session, up US$3.53 to close at US$47.20. The company doesn’t hedge its production and was mocked for not doing so in previous decades when gold prices were in the trough. Now the company is a favourite of gold bugs seeking maximum exposure to rising prices.
The share-price boost also reflects growing speculation that Newmont may make a counter-bid for besieged Placer Dome. Bloomberg and Dow Jones both report that Newmont has signed a confidentiality agreement to review Placer’s data, as have several other senior gold companies. Barrick Gold is still vying to acquire Placer with the help of Goldcorp, and their combined US$9.2-billion bid will be tough to beat. Barrick was up US$1.77 at US$27.43, while stoically silent Placer gained US$1.05 to close at US$21.39.
Alcoa was the second most active resource-oriented stock on U.S. markets, though it only gained a dime to US$26.71 over the session. Silver producer Coeur d’Alene Mines was ahead US62 to US$4.59 after reporting net earnings of US$3.5 million in the latest quarter, compared with losses three times that a year earlier.
With heavyweight Rob McEwen on board, U.S. Gold continues to attract investor attention for its newly launched search for large gold deposits in Nevada. Shares in the company climbed US68.4 to US$3.57.
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