The 79 Times: How Falls After Market Correction, $75 Million in Gold Treasure Found

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Newcrest Mining (ASX: NCM) announced that its half year profits fell 50% to AUD$37 million yesterday. However, the company also reported that two major development projects, Telfer Underground and Kencana, were completed. The final capital cost to complete the Telfer project was AUD$1.472 billion, in line with previous guidance. Kencana, located in Indonesia, was completed on time for a final capital cost of USD$52 million.

The Herald Sun reports that as a result of these announcements, Newcrest shares continued to recover yesterday, despite the fall in profits, ending up more than AUD$1.32, to AUD$23.87. Other Australian gold stocks did not fare as well, with Lihir (ASX: LHG) losing 11c to AUD$3.46 and Newmont (NYSE: NEM) remaining at AUD$5.94. The gold price in Sydney trading closed at $US685.65 an ounce, down $US1.70 on the previous night’s close.

Stocks in the US fell dramatically yesterday after a selloff in China and a weak economic report in the U.S. scared risk-taking investment optimists around the world, according to reports in the Chicago Tribune. Traders said the selloff began after the Shanghai stock market lost nearly 9% of its value, reflecting efforts by the Chinese government to control stock market speculation.
 
Gold fell as well, leading traders to comment that this move indicates speculative sentiment is fading. They also noted that a stock market pullback in China might curtail the demand for gold jewellery in that country.

Marketwatch reports that gold futures for April delivery closed down USD$2.60 at USD$687.20 an ounce, staging a partial recovery from a low of USD$677.50. It climbed as high as USD$692.50 during the session to mark a fresh seven-month, intraday high.

Forbes reports that despite the fall in gold prices, most players agree that it will top USD$700 in the near term. Virtual Metals analyst Matthew Turner said that while some players fear current gold price levels are unsustainable, overall sentiment remains upbeat, meaning gold’s upwards trajectory will remain intact near term.

South Carolina newspaper The Times and Democrat reports that a lawsuit over the sunken ship SS Republic, which had 51,000 gold coins on board, will be heard in South Carolina. The ship, which was carrying gold and supplies from New York to New Orleans when it sank in a hurricane off the Georgia coast in 1865, had USD$75 million in gold and artifacts on board. The lawsuit alleges Odyssey Marine Exploration of Tampa, Florida, found the ship using information South Carolina shipwreck hunter Lee Spence provided.

Citigold Corporation (ASX: CTO) has received approval to list its shares on the Dubai International Financial Exchange (DIFX). Citigold will be the second gold miner to list on the DIFX, and controls Australia’s richest goldfield, which is located at Charters Towers in north Queensland.

The 79 Times

The Daily Reckoning
The Daily Reckoning offers an independent and critical perspective on the Australian and global investment markets. Slightly offbeat and far from institutional, The Daily Reckoning delivers you straight-forward, humorous, and useful investment insights from a world wide network of analysts, contrarians, and successful investors. Founded in 1999, The Daily Reckoning is published in 7 countries with a worldwide readership of almost 1 million people.
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