Miners see the golden lining

28 June 2016 - 09:49 By BDlive

Gold miners AngloGold Ashanti and Gold Fields will be among the few winners of the Brexit crisis, ratings agency Moody's said yesterday.Gold Fields jumped nearly 13% and AngloGold nearly 10% on Friday, swimming against a flood that saw global stock markets lose $2-trillion after the U K voted to leave the EU.The Brexit shock sent gold rallying 8.5% to a two-year high of $1358/oz in a few hours of the close of voting stations - gold's biggest rally since the global financial crisis of 2008, Moody's said.At the same time the dollar strengthened as investors bought US treasuries, driving a 4% depreciation of the Australian dollar and a 9% depreciation of the rand relative to the US dollar."The depreciated Australian dollar and South African rand are credit-positive for gold miners AngloGold Ashanti [Baa3 stable] and Gold Fields [Ba1 stable], whose free cash flow will increase with lower operating costs for their Australian and South African mines in US dollar terms, along with a higher US dollar gold price increasing revenues," Moody's assistant vice-president Douglas Rowlings wrote.AngloGold derives about 14% of its gold from Australia and 26% from South Africa , while Gold Fields derives 10% from South Africa and 43% from Australia. ..

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