Gold Slips On Flat Q1 Demand; SolGold plc And Bullabulling Gold Ltd Release Updates

SolGold plc (LON:SOLG) slips despite positive drilling results, and takeover target Bullabulling Gold Ltd (LON:BGL) moves higher.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Gold gave up Monday’s gains and fell back below $1,300 per ounce on Tuesday, touching a low of $1,286, before stabilising around $1,294 in mid-afternoon trading. Market appetite for gold may have been dampened by the latest quarterly figures from the World goldbarancoinsGold Council, which showed that demand for gold was broadly flat during the first quarter, as a rise in jewellery demand was offset by reduced investment and central bank demand.

The main routes by which traders and investors gain exposure to gold are exchange-traded gold funds such as the $33bn SPDR Gold Trust (NYSE: GLD.US) ETF, which was down by 1% at $124.59 soon after US markets opened, paring its year-to-date gains to just 5.6%. Meanwhile, a London-listed alternative, Gold Bullion Securities (LSE: GBS), was down 0.3% at $124.22, reducing its gains for 2014 to just 3.4%.

Gold equity news

Despite gold’s lacklustre performance, several small-cap explorers saw heavy trading on Tuesday after releasing market updates.

SolGold (LSE: SOLG), a favourite among UK small-cap investors, slipped nearly 5% to 7.9p on moderate volumes today, after reporting the assay results from hole 6 of its Cascabel drilling programme.

SolGold’s General Manager of Exploration, Dr Bruce Rohrlach, described the assay results as ‘highly encouraging’ and said that they reinforced the company’s magnetic model suggesting “a high grade copper gold porphyry deposit” is nearby. However, shareholders may have been hoping for something more dramatic: SolGold’s shares have risen by 133% over the last year, but are down by 50% from their 52-week high of 16p, as investors have cashed in early gains following impressive early drilling results.

Another hotly-tipped small cap gold miner, Bullabulling Gold (LSE: BGL), was in the news again today, after the firm’s management issued a statement reiterating their opposition to a takeover offer from Norton Gold Fields Ltd. Bullabulling shares rose by more than 5% to 3.9p following the statement, which urged shareholders to reject Norton’s offer by taking no action, and confirmed that none of Bullabulling’s directors intend to accept the offer for their own shares.

Bullabulling’s current 3.9p share price is broadly equal to Norton’s AUD$0.07 per share offer, and some shareholders may be tempted to accept the bid, as it would lock in a 70% gain on the firm’s share price at the start of 2014.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Roland does not own shares in any of the companies mentioned in this article.

More on Investing Articles

Person holding magnifying glass over important document, reading the small print
Investing Articles

Just released: our top 3 small-cap stocks to consider buying in October [PREMIUM PICKS]

Small-cap shares tend to be more volatile than larger companies, so we suggest investors should look to build up a…

Read more »

Investing Articles

How I’d use an empty Stocks and Shares ISA to aim for a £1,000 monthly passive income

Here's how using a Stocks and Shares ISA really could help those of us who plan to invest for an…

Read more »

Investing Articles

This FTSE stock is up 20% and set for its best day ever! Time to buy?

This Fool takes a look at the half-year results from Burberry (LON:BRBY) to see if the struggling FTSE stock might…

Read more »

Investing Articles

This latest FTSE 100 dip could be an unmissable opportunity to pick up cut-price stocks

The FTSE 100 has pulled back with the government’s policy choices creating some negative sentiment. But this gives us a…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

As the WH Smith share price falls 4% on annual results, is it still worth considering?

WH Smith took a hit after this morning’s results left shareholders unimpressed. With the share price down 4%, Mark Hartley…

Read more »

Investing Articles

The Aviva share price just jumped 4.5% but still yields 7.02%! Time to buy?

A positive set of results has put fresh life into the Aviva share price. Harvey Jones says it offers bags…

Read more »

Investing Articles

Can a €500m buyback kickstart the Vodafone share price?

The Vodafone share price has been a loser for investors in recent years, and the dividend has been cut. We…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Growth Shares

3 mistakes I now avoid when choosing which growth stocks to buy

Jon Smith runs through some of the lessons he's learnt the hard way over the years about what to look…

Read more »