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Johannesburg - Gold shares were the star performers on the JSE on Wednesday as the yellow metal hit a two-week high amid a new round of political uncertainty caused by US President Donald Trump.
Investors fled to gold as a safe haven as the dollar fell, after a source said Trump asked the FBI to end a probe into his former security adviser.
The reports raised questions over whether obstruction of justice charges could be laid against Trump, weakening confidence in his ability to push through an aggressive stimulus programme investors had been banking on since his election in November.
Gold shares were not only supported by the price, which gained almost 1% to $1 243.45, but also by a slightly weaker rand which slipped to R13.18 to the dollar despite the weak US currency. Analysts said the rand fell back somewhat after encountering technical resistance, and the demand for risk assets has also waned somewhat.
The rand price for gold gained 1.37% to R16 353/oz and the Gold index at one stage was almost 3.4% higher. All the major gold shares traded sharply higher, and at mid-morning the index was still 2.62% stronger.
The Resources index was almost 1% stronger, but industrial and financial shares did not move as much. At mid-morning the All-share index was 0.39% higher at 54 225 points, while the Top 40 index gained 0.48% to 47 655 points.
The Financial index was 0.45% lower, while the Industrial index gained 0.52% as it was again pulled higher by Naspers [JSE:NPN], the biggest share on the JSE. European markets did not provide much support as they also fell back due to the political turmoil in the United States.
The rand traded in a range of R13.06-R13.19 after reaching its highest level since March 30 on Tuesday. Analysts said it is unlikely to weaken further, as the dollar's index against a basket of six major currencies has now given up all of the gains made after Trump's election victory in November.
The greenback is also held back by mixed US economic data, raising more doubts about the rosy views on the economy held by some.
While US manufacturing production recorded its biggest increase in more than three years in April, housing starts posted a surprise fall to five-month lows. The data came after Friday's softer-than-expected retail sales and inflation.
Harmony [JSE:HAR] was the top performer in the gold sector, gaining 4.71% to R31.52. Before Wednesday’s trade the stock was 3.26% lower over the past 90 days and 44.91% over the past year.
AngloGold Ashanti [JSE:ANG], which lost 36.7% over the past year and 3.15% over the past 90 days, regained 3.22% to trade at R153.34.
Gold Fields [JSE:GFI] was 2.12% stronger at R49.53, while Sibanye [JSE:SNG] gained 2.25% to trade at R28.60.
Anglo American [JSE:AGL] was the best performer among the top commodity shares and gained 1.87% to R187.06. Anglo lost more than 9% over the past 30 days, but is still 32.25% higher over the past year.
BHP [JSE:BTI], formerly known as BHP Billiton, traded 0.35% higher at R204.49. The share is only 5.35% higher over the past year, but was more stable than Anglo and lost only 0.03% over the past three months.
Naspers, which underwent a strong correction on Tuesday, was back on its winning streak on Wednesday and traded 2.30% higher to a new intraday all-time high of R2 731.29.
Vodacom [JSE:VOD] continued its strong rum of the past few days and traded 1.33% higher at R162.07.
