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3 Gold Shares Rising Strongly

LONDON -- The price of gold bounced around last week, ranging between $1,366 and $1,395 per ounce. However, by the end of the week, little had changed, and gold for immediate delivery ended the week 0.4% higher at $1,387 per ounce.

Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $51 billion SPDR Gold Trust (NYSEMKT: GLD  ) , ended the week 0.73% higher at $134.43, while London-listed Gold Bullion Securities (LSE: GBS  ) edged up 0.53% to end the week at $133.93. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 15.2%, while the value of SPDR Gold Trust shares has fallen by 17.6%.

Gold's big movers
Several miners made gains last week, outperforming the price of gold. Although these companies may not have issued major updates last week, their above-average performance suggests that investors may believe they have been discounted too heavily following recent falls in the price of gold.

Petropavlovsk (LSE: POG  ) climbed 3.2% to 140 pence over the final two days of last week after the company reported that asset manager Schroders had taken a 5% stake in the company. Petropavlovsk's share price has fallen by 62% so far this year but has gained 7.3% over the last month after the company announced cost-cutting plans and said it had hedged approximately 55% of its output for the next year at $1,408 per ounce, slightly above the current price of gold.

Shanta Gold (LSE: SHG  ) edged higher last week and has risen by 5.5% to 11.8 pence over the last month. The firm's stock climbed on Friday following a report that a strategic advisor to the board of the company, Jonathan Leslie, had purchased 2,300,000 shares in a deal worth £270,250 that increased his stake in the firm to 3.34%, or 15.4 million shares. Shanta Gold's main asset is the New Luika gold mine in Tanzania, which began production in August 2012 and has sold 22,000 ounces of gold to date.

DRDGold (NYSE: DRD  ) climbed 4.2% to $6.25 last week. Rather than mining gold, this South African firm is focused on large-scale reprocessing of the tailings, or waste piles, of large gold mines in order to extract the gold that was not captured by the original mining process. This business is heavily mechanized and requires a relatively small workforce, giving DRDGold some protection from the rising labor costs that are reducing the profitability of many South African mining firms.

Shares versus commodities
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Related Tickers

9/28/2016 4:20 AM
GBS $125.80 Down -0.24 -0.19%
ETF Securities Gol… CAPS Rating: No stars
POG $7.04 Down -0.02 -0.21%
Petropavlovsk CAPS Rating: No stars
SHG $10.98 Down -0.02 -0.15%
Shanta Gold Ltd. CAPS Rating: No stars
DRD $4.89 Down -0.15 -2.98%
GLD $126.62 Down -0.93 -0.73%
SPDR Gold Trust CAPS Rating: **