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Gold miners shot for the sky, but retailers dragged the JSE back down to earth

by , 23 July 2013

Yesterday, the price of the yellow metal hit a one month high. The gold price rally was great for the miners, which closed with mighty gains. But retailers took the good out of the gold miners' day. Let's see what happened…

By lunchtime yesterday, the gold price was already up 1.7%, reports Fin24, thanks to a weaker dollar. But the yellow metal is “still down more than a fifth this year”.

The rally in the gold price sent the JSE’s gold miners on a rally too. AngloGold Ashanti gained 8.15%, while Harmony surged 8.86% higher.

But it wasn’t plain sailing for the JSE.

“Gains were capped by retailer Truworths,” notes MoneyWeb. The retailer plunged 7.08% “after it warned profit growth would miss expectations”. The blame was set at the door of “debt-laden customers”.

The net effect was the Top 40 closed up 1.01% higher and the All Share Index closed 0.85% up.

The gold price smashed through $1,300

Bullion’s jump above “above $1,300 an ounce sparked a rash of short covering,” notes BDLive. Investors closed out “bets that prices would fall, propelling the metal higher”.

With “negative bets against gold” increasing over the past few weeks, there’s been a greater chance of “short-covering rallies,” adds BDLive.

The precarious rand also had a good day, spurred on by the weaker dollar, reports I-Net Bridge. The greenback has been weaker following the US Federal Reserve’s comments last week about its stimulus programme.

And amidst all the construction sector scandal, it was Group Five who “was the biggest gainer” on the ALSI, notes MoneyWeb. The company impressively added 9.5% after releasing news its “full-year profit would more than double”.

With reporting season well underway, we’ll have to wait and see what other surprises are in store for the JSE.

Gold miners shot for the sky, but retailers dragged the JSE back down to earth
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