Gold price breakout sparks massive move into mining stocks – by Frik Els ( – June 19, 2014)

In a surprise move after months of subdued trade, the gold price jumped more than $48 or nearly 4% an ounce on Thursday, its best trading performance since September last year.

Gold ended the day at its high of $1,320 an ounce on Thursday, fighting back from lows of $1.244 at the beginning of this month. The metal is up 10% in value this year. The silver price jumped nearly 5%, climbing back above $20 an ounce for the first time in two months.

Gold’s positive momentum sparked heavy buying of gold counters with the Market Vectors Gold Miners ETF (NYSEARCA:GDX), holding stock in the world’s top gold miners, soaring 5.4% bringing its gains so far this year to 23.5%.

The bellwether for the industry for decades The Philadelphia Gold & Silver Index (INDEXNASDAQ:XAU) gained 5% and is back to levels last seen in March when gold hit a 2014 high of $1,379 an ounce.

By the close on Thursday, Barrick Gold Corp (NYSE:ABX, TSE:ABX) was up 3.2% with 4.3 million shares changing hands, more than double usual volumes for the world’s number one producer of the metal.

It was revealed earlier this week the company has been in talks about about possible partnerships with China’s largest gold producer, China National Gold.

The state-owned giant with nearly 50 operating gold mines in the country said it’s actively looking at acquisition in gold, silver and copper companies around the world as it embarks on an expansion drive.

It was revealed this week that Barrick has been in talks with China’s largest gold miner about possible partnerships

Co-operation with Barrick would not include the the Toronto-based miner’s Pascua Lama projecton the border between Chile and Argentina which is the subject of a number of class-action lawsuits.

The class actions allege that Barrick Gold shareholders lost billions of dollars as a result of Barrick’s “misrepresentations and failures” regarding the stalled project.

The < href=””>technically and politically challenging project high in the Andes launched in 2006 (initial capex costs were pegged at $1.5 billion but has now ballooned to $8.5 billion) suffered a number of defeats in Chilean courts about water use and the impact on glaciers in the area.

Barrick which will produce roughly 7 million ounces of gold in 2014 is now worth $22.7 billion on the TSX, compared to its peers up a relatively modest 4% in 2014. Barrick shares struck 21-year lows in July last year after peaking at a $54 billion market value in 2011.

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