US markets negative again, May 28-June 1

U.S. markets re-opened May 29 after the Memorial Day holiday to more worrying economic news on the home front, with jobs growth slowing again in May and the unemployment rate rising to 8.2%, up from 8.1% in April. The Dow Jones Industrial Index fell 2.70% or 336.26 points to finish the abbreviated trading week at 12,118.57 points, while the S&P 500 index lost 3.02% or 39.78 points to close at 1,278.04. The New York spot price for gold rose 3.3% or US$52.60 per oz. to end the week at US$1,626.30 per oz., sending a number of gold stocks higher.

Topping the list of value gains among the gold producers was Randgold Resources, which advanced US$6.30 to US$87.26 per share, on no news, followed by Royal Gold, which climbed US$5.72 to US$74.75 per share, also on no news. Barrick Gold gained US$2.11 to US$41.91per share. On May 25, the gold major told shareholders that its operations had added $13 billion in economic value to its host countries in 2011, up from more than $9 billion in 2010. The company also said it is allocating about 45% of its $450 million to $490 million exploration budget this year to North America, and the majority to Nevada. (About 45% of the Toronto-based company’s global gold production is from North America, primarily from Nevada.)

Coeur d’Alene Mines edged US$0.89 higher to close at US$18.35, after noting the previous week that full production had resumed at its Palmarejo silver-gold mine in Mexico, after the small group of employees that had been blocking access to the mine agreed to return to work. Coeur d’Alene also said that the temporary shut-down is not expected to have a material impact on 2012 production at the mine. AngloGold Ashanti, meanwhile, increased US$0.80 to US$36.86 per share following news May 29 that it had acquired the remaining 50% of the Serra Grande mine in Brazil that it didn’t already own, from Kinross Gold, for US$220 million. The company said it is paying for the transaction with existing cash reserves and debt facilities. Last year Serra Grande produced 134,000 ounces of gold at a cash cost of US$767 per oz. The  operation consists of three underground mines, one open-pit mine, and a processing plant. AngloGold expects the acquisition to increase its annual attributable production from Brazil to more than 500,000 ounces of gold.