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Johannesburg - Gold shares were again the star performers on the JSE on Monday morning as investors rushed to gold as a safe haven after North Korea conducted its sixth nuclear test on Sunday, sparking further condemnation and a warning from US Defence Secretary Jim Mattis of a "massive military response".
By mid-morning the Gold index was almost 4.5% higher after the gold price jumped 1.02% to $1 337.83 per fine ounce. Before Monday gold was already almost 6% higher over the past month, as the North Korean government continued to test US President Donald Trump and his allies’ political will.
The latest test took place less than week after North Korea rattled global markets by firing a rocket over Japan.
With the dollar again under severe pressure, other precious metals also rallied and platinum traded 2.47% higher at $1 010.35/oz and palladium jumped 5.98% to $990.89/oz. Silver was 1.65% stronger at $17.46/oz.
The Platinum index was however only 2.07% stronger as the strong rand put a cap on mining share gains. The Resources index was only 0.43% higher. The rand traded at R12.95 to the dollar compared to the New York close of R13.00/$.
The other indices were however mostly in the red, in line with sharp losses on global markets as political uncertainty dampened investor’s risk appetite.
The All-share index lost 0.17% to 56 417 points, and the Top 40 index was 0.22% down at 49 888 points. The Industrial index traded 0.42% lower, while the Financial index was 0.15% softer.
Local investors were also cautious as important local economic news will be released later this week. Statistics South Africa releases the latest economic growth figures on Tuesday and economists expect growth of 2.2% in the second quarter, after a 0.7% contraction in the first quarter.
The statistics agency will also release July’s mining and manufacturing data on Thursday. Also due this week are the Standard Bank Purchasing Managers’ Index for August and the South African Chamber of Commerce and Industry’s business confidence index.
DRDGold [JSE:DRD] was the best performer among the gold shares, trading 8.06% higher at R5.05; AngloGold Ashanti [JSE:ANG] gained 4.80% to R137.00. Gold Fields [JSE:GFI] was 4.74% stronger at R59.39 and Harmony [JSE:HAR] firmed 4.27% after being more than 5.5% higher at one stage.
Sibanye [JSE:SGL], with interests in gold and platinum, was 2.98% stronger at R21.07. It was the busiest share on the JSE, with more than 2 million shares being sold.
Gold shares have made strong gains over the past month and before Monday’s trade Sibanye was already 33.55% stronger over the previous 30 days. Harmony gained 17.7% over the same period and Gold Fields 16.3%. DRDGold traded 15.35% higher over that time, but AngloGold lost 14.34% as the market responded negatively to plans to sell off some local assets. The share however gained 9.0% over the previous seven days and Harmony traded 10.16% higher over that period.
Platinum shares were more subdued and Lonmin [JSE:LON] was the top performer, jumping 3.75% to R14,58. Impala [JSE:IMP] was 1.02% higher at R40.57 but earlier traded as high as R40.57. Anglo American Platinum [JSE:AMS] was only 0.19% higher at R351.67.
BHP [JSE:BIL] was 0.53% up in early trade on a 52-week intraday high of R249.80, but dropped back later and at midday was only 0.08% stronger at R248.63. Glencore [JSE:GLN] was 0.45% firmer on a new high of R61.84 and Anglo American [JSE:AGL] gained 0.38% to a 52-week high of R237.86.
Santam [JSE:SNT], which closed on a 52-week high of R264.00 on Friday, traded 0.8% higher at R264.22.
