U.S. stocks retreat again, May 7-11

More alarming economic data from China and the European Union, China’s biggest export market, along with political deadlock in Greece, combined to send U.S. equities down sharply during the May 7-11 trading week. China’s industrial output in April expanded at its slowest annual pace in three years, while fixed asset investment in the first four months of the year grew by 20.2%, the slowest level since the end of 2002. The week also brought more news of excess on Wall Street, with the failed hedging strategy at JPMorgan that will cost the bank more than US$2 billion. The Dow Jones Industrial Average dropped 217.67 points or 1.67% to close at 12,820.60, while the S&P 500 index lost 176.96 points or 1.50% to 11,694.27. The Philadelphia Gold and Silver index lost 5.51 points or 3.52% to finish at 151.25.

Royal Gold advanced US$2.13 to US$63.20 per share on no news. Earlier this month the company announced record royalty revenue of US$69.6 million in the third quarter of fiscal 2012, a 25% year-on-year increase. Net income rose 33% over the fiscal third quarter a year ago to a record US$26.0 million with record operating cash flow of US$47.5 million, 16% higher than the previous year.

Adjusted headline earnings of US$429 million in the first quarter, more than double the same period a year earlier, and board approval for the development of three growth projects, helped propel shares of AngloGold Ashanti up US$0.24 to US$33.48 apiece. The company’s board gave the green light to invest US$1.9 billion over the next five years to expand the Cripple Creek and Victor mine in the U.S. and develop the Mongbwalu and Kibali projects in the Democratic Republic of the Congo. AngloGold says it plans to boost production to between 5.4 million and 5.6 million ounces by about 2014 from a combination of new projects in Africa, Australia, and South America, and through the expansion of some existing operations.

Randgold Resources dropped US$4.50 per share to finish the week at US$76.72 on no news and despite posting solid financial results on May 3. The company reported profit of US$104 million in the first quarter, up 126% over the same quarter a year ago, with production of 165,443 ounces of gold, a 19% year-on-year increase. Both figures, however, were down by 28% and 13% respectively on the previous quarter’s record results. The recent coup in Mali, expansion of its Loulo complex and the stabilizing of the company’s Tongon mine in Côte d’Ivoire, all contributed to the downturn.