Gold Tanks on Profit-Taking, Harmony Keeps S. Africa Shaft Open in Union Deal


Gold is tanking in morning trade as equities worldwide bounced back up and profit-taking kicked in. Certainly, with gold reaching record highs last week, analysts broadly agree that the yellow metal's gains cannot continue indefinitely.

Still, as the euro remaining weak against the dollar and worries about sovereign debt risks spreading beyond the Greek borders persist, gold continues to be regarded as a safe haven in the longer term.

At 0815 ET, gold is 1.6% weaker at $1,208.80 an ounce, while silver is down 0.7% at $18.73 an ounce, and copper is up 2.7% at $3.00 a pound.

Holdings in the biggest gold-backed ETF, the SPDR Gold Trust, rose by 3.04 metric tons to a record 1,217.11 metric tons.

On the production side, Venezuela announced that it will double its gold output next year to 10 tons from its current level of 4.2 tons. Industries and mining minister Jose Khan said that production could triple and reach 15 tons by 2012, as he showed Chinese officials the country's Capitan Eduardo Vera ore-processing plant.

As for Harmony Gold Mining Co. ( HARJ ), the company has agreed with unions to continue operations at one of its three loss-making shafts in South Africa that it had planned to close down. Last month, Harmony said that it will slash 3,700 jobs by shutting down three shafts at its Virginia mine in Free State province. Under its latest agreement with the unions, however, Harmony will keep one shaft open if it does not make losses for two straight months and the total costs remain under $33,750 per kilogram of gold.

Meanwhile, customers strapped for cash will be able to convert their gold and silver jewelry into greenbacks at Kmart and Sears. Sears Holdings Corp. ( SHLD )said that the service will be available at its two retailing group's jewelry departments which will ship the items to Pro Gold Network, a company that buys precious metals from consumers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

Referenced Stocks: HARJ , SHLD

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