Gold mining shares lead FTSE revival

While worries over market weakness have lead to safe-haven gold investment, the subsequent strength of the gold price is now helping to buoy other shares – through resurgent gold mining equities.

News of prospective mergers and takeovers in the mining sector have fuelled the investor interest, with rising shares in companies like Anglo American, Vedanta Resources and RioTinto helping to drive the FTSE 100 up 58.5 points today (November 23rd).

British stock market optimism was closely linked to the mining sector rumor mill, with anticipation of a renewed BHP Billiton bid for gold miner Rio Tinto growing as BHP appointed two advisers, supposedly in preparation for the takeover.

Meanwhile India-focused gold mining firm Vedanta saw its shares rise more than 4.53 per cent as suspicion mounted that Chinese bidders were readying a bid for the firm – although Vedanta declined to comment on the rumor.

Other mining shares to rise in value were Anglo American, up 3.24 per cent, Lonmin up 2.72 per cent, Xstrata some 2.3 per cent higher, and Antofagasta, staging a 2.19 per cent rise.

Investors keen to buy gold have repeatedly driven the price of the metal up on recent weeks, so with gold demand outstripping supply, gold miners now hold a high premium and are being backed to up their operations.