Gold drags stocks trend lower
JOHNNESBURG (Sept 23) South African stocks inched lower ahead of a bank holiday on Tuesday but gold shares like Harmony were on the back foot as the spot price for bullion swayed on confusion over the outlook of US monetary policy.
Bullion was down as much as 0.9% in earlier trade but recouped losses and turned positive in late trade.
Gold has lost more than a fifth of its value this year, driven largely by U.S. Federal Reserve hints that it may begin to cut back its $85bn monthly bond-buying programme before the end of 2013. Uncertainty over the timing of the move has led to choppy trading.
Johannesburg's Top 40 - (Tradeable) [JSE:J200] index dropped 0.25% to 39 444.06 on Monday and the All Share [JSE:J203] was down 0.17% to 44 017.73. South African markets will be closed on September 24 to mark Heritage Day.
"People are not aggressively taking any position ahead of the holiday tomorrow," said Henre Herselman, a derivatives trader at Nedbank Private Wealth.
The gold mining index shed 0.4% led by Harmony Gold, which was down 3.5%. Smaller producer DRDGold lost 4.5% .
Gold Fields went against the grain and added 2.4% after Citigroup raised its rating to "neutral", from "sell".
Telkom SA also benefitted from a positive rating, rising 1.5% after JP Morgan named also gave it a "neutral" from "underweight".
Trade was relatively dull with only 103 million shares changing ownership, according to preliminary bourse data. Advancers led decliners 152 to 134, while another 56 were flat.
