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Gold stocks become haven in emerging-market storm

Johannesburg - Investors seeking relative safety from the storm in emerging markets jumped on South African gold shares such as AngloGold Ashanti [JSE:ANG] as the rand sank.

AngloGold [JSE:AGL], Sibanye Gold [JSE:SGL] and Gold Fields [JSE:GFI] were among the top five performers in the FTSE/JSE Africa All-Share Index at 10:39 in Johannesburg.

The FTSE/JSE Africa Gold Mining Index climbed for a sixth straight day as slumping Chinese markets set off further emerging-market weakness.

“Gold stocks are an area of relative safety in such a risk-off environment,” said Ferdi Heyneke, a fund manager at Afrifocus Securities.

“The weaker rand also plays well into gold stocks” as mining companies’ costs are in the local currency and their revenue in dollars, Heyneke said.

The rand and local stocks joined a global rout of equities and commodities on the concerns over a slowdown in China, South Africa’s top export destination. The currency weakened as much as 8.5% to 14.07 against the dollar, a record, before trimming losses while stocks fell by the most in five years.

READ: Rand sinks most since 2011 as commodities tumble

AngloGold traded 2.2% higher at R109.93, Sibanye Gold was up 0.3% at R16.16, Gold Fields rose 2% to R45.613 and Harmony Gold [JSE:HAR] increased 1.6% to R13.61.


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Rand - Dollar
18.89
+0.3%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
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