Update on Gold Miners AngloGold and Compania de Minas Buenaventura

Brad Zigler

You'd think shares of South African gold miner AngloGold Ashanti Ltd (NYSE: AU) would have spiked higher last week after management raised the company's first-quarter production forecast by 8%. But you'd be wrong. The good news was apparently already discounted. AngloGold actually opened lower on the day, while most other gold miners started the day in positive territory.

AngloGold raised its outlook to 1.19 million ounces as a direct result of the stabilization of state-owned electrical utility, Eskom which had cut back electricity to AngloGold and other mine operators last winter as South Africa's creaky power grid faltered.

Stabilization doesn't mean restoration, though. AngloGold has targeted a return to full production, but the company will achieve that goal through energy-saving measures.

Among other miners making up the Amex Gold Miners Index, Peruvian Compañía de Minas Buenaventura SA (NYSE: BVN) was especially buoyant on Friday, opening up nearly 3% higher at $69.59. Three-quarters of the Gold Miners Index components, in fact, opened higher.

A gold stock buy signal-the first since 2005-was flashed when the Gold Stock Oscillator flipped over on March 25 (see "Stocks Can Be Better Than Gold"). Since then, AngloGold has gained 11.3%, while Compañía de Minas ticked up 1.4%. Bullion, basis the London morning fix, has actually fallen 2.8% since last week but appears to be looking for a near-term low.

Gold Stock Oscillator