With a third Iraq war looming, investors are scrambling for gold.
Ahead of today’s emergency vote in Parliament to decide whether the UK should join airstrikes against ISIS in Iraq, London-listed gold-miners were in demand as investors used them as a fiat for the real thing.
Mexican-focused gold and silver miner Fresnillo rose 13p to 761p, Mali miner Randgold Resources put on 64p to 4312.5p, Russian digger Polymetal International climbed 14.7p to 490.6p and Egyptian based Centamin gained 1.6p to 61.35p.
“There are air strikes in Syria, bomb plans in the US and the Paris subway has been revealed as a potential target — geopolitical turmoil is still with us,” said Gautam Batra, investment strategist at Signia Wealth. Batra said economic factors also played a part, adding: “Because of the likely increase in interest rates in the US, people are just slightly hedging their bets.”
Aside from gold miners, the Footsie was quiet, down 19.99 points at 6619.72. The blue-chip index is on track for its worst weekly fall since June 2013, off around 3% since last Friday.
Sports Direct was among the worst performers, off 15.5p at 622.5p, with traders pointing to unease about boss Mike Ashley’s use of the balance sheet to bet on Tesco, down 1.1p at 191.3p.
The London Stock Exchange drifted 7p to 1885p in spite of news that its £938 million rights issue was 97% subscribed.
Aberdeen Asset Management fell 1.2p to 397.5p after it revealed that its Asian unit has been given wider access to the Chinese equities market.
Balfour Beatty rose 6.3p to 226.45p after an upgrade from Deutsche Bank. The builder has no chief executive, has issued several profit warnings from its construction division and endured a botched merger approach from Carillion, but the bank feels this all might have led the firm to be undervalued.
Andrews Sykes, which leases air conditioning and heating equipment, fell 87.5p to 290p on AIM, after admitting that first-half revenues are £3 million off last year’s at £26.7 million. Gains in air conditioning were eclipsed by sluggish demand for heaters.
