Gold Rally Lifts Australian Miners

Mayank Mehta
03 Sep, 2009
New York City

Australian trade deficit in July increase after imports exceeded exports for the second month in a row. The Australian dollar increased after gold and silver prices surged. Coles Group enters general insurance business. Karoon Gas plans to drill additional areas off the coast of Western Australia.

[R]6:00 AM Sydney, Australia – Australian trade deficit in July increase after imports exceeded exports for the second month in a row. The Australian dollar increased after gold and silver prices surged. Coles Group enters general insurance business. Karoon Gas plans to drill in additional areas off the coast of Western Australia.[/R]

Gold rallied for the third day in a row in New York trading and surged to $999.50 before settling at $997.50. The surge reflects the nervousness related to dollar and inflation expectations in the U.S.

ASX 200 index in Australia decreased 8.60 or 0.19% to 4,429.60. Of the stocks in the index, 98 increased, 92 declined and 10 were unchanged.

Australian dollar closed at 84 U.S. cents.

Australian Deficit Rises

Australian trade deficit increased in July after exports fell 1% to A$20.04 billion and imports increased 4% to A$21.6 billion.

The seasonally adjusted deficit increased to A$1.56 billion in the month from A$538 million according to the latest data released by the Australian Bureau of Statistics.

The data included 2% decrease in metallurgical coal prices and 7% in non-metallurgical coal prices.

India Explores Coal Imports Australia

Coal India is prepared to import as much as 50 million tons of thermal coal from Australi beginning 2016, according to its chairman Partha Bhattacharya interview with the Australian.

Currently Australia exports 130 million tons of thermal coal but very little of that finds its way to India. India relies for most of its imports from Indonesia and has secured mining rights in Mozambique.

India is expecting a coal shortage of 200 million tons a year as early as 2012.

ASX Movers

Straits Resources Limited led the decliners in the S&P ASX 200 index with a loss of 13.1% followed by losses in Transpacific Industries Group Ltd of 6.1%, in Fleetwood Corporation Limited of 6.1%, in Pacific Brands Limited of 5.3% and in Astro Japan Property Trust of 4.4%.

St Barbara Limited led gainers in the S&P ASX 200 index with a rise of 20.0% followed by gains in Sino Gold Mining Limited 10.6%, in Murchison Metals Limited of 8.3% and Newcrest Mining Limited of 7.6%.

Other Movers

Caltex Australia Limited dropped 1.2% to A$12.00 after the oil refiner faces anti-trust scrutiny for its A$300 million acquisition of 302 Exxon Mobil retail sites in Australia.

Coles Group, the supermarket leader plans to enter general insurance market. The company plans to offer auto and general insurance on a six-month trial basis. The company has noted the success of Tesco in UK with the insurance and other financial services products.

Karoon Gas Australia Ltd rallied 2.9% to A$10.41 and the energy exploration company and ConocoPhillips are exercising an option to drill two additional wells in the basin off Western Australia.

Murchison Metals Limited climbed 8.3% to A$1.94 after the iron-ore producer said its half-owned Jack Hills mine could produce up to 2.1 billion tons of iron ore based on early drill results.

Newcrest Mining Limited the gold producer surged 7.6% to A$31.85 after gold prices surged to a high last seen in late February. St Barbara Limited soared 20.0% to A$0.270.

Sino Gold Mining Limited jumped 10.6% to A$6.94 after the mining and processing of gold ore said does not expect to require regulatory clearance in China for its stock based merger with Eldorado Gold. According to chief Jake Klein of Sino Gold interview with Dealreporter.

Telstra Corporation Limited added 0.6% to A$3.29.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 65.82 or 0.64% to 10,214.64, Hang Seng index in Hong Kong increased 239.68 or 1.23% to 19,761.68 and CSI 300 index in China higher 161.04 or 5.57% to 3,051.96. ASX 200 index in Australia decreased 8.60 or 0.19% to 4,429.60. The FTSE Bursa KL Composite index in Malaysia closed higher 5.65 or 0.48% to 1,173.66.

The Kospi Index in South Korea increased 0.37 or 0.02% to close at 1,613.53. SET index in Thailand closed higher 11.42 or 1.75% to 665.54 and JSE Index in Indonesia increased 36.32 or 1.59% to 2,322.25. The Sensex index in India decreased 69.13 or 0.45% to 15,398.33.