Despite Friday's massive rises for precious metals the shares of a number of gold and silver miners trading on the London Stock Exchange saw their closing prices drop sharply.
Fresnillo (FRES) shares closed down more than 4% after a one-off trade. Randgold Resources (RRS) and African Barrick Gold (ABG) also saw their prices plunge from daily highs.
This may be normal after a volatile day but it still looks odd. These kinds of moves have been noted on this blog before (here and here) showing that the share price of Fresnillo tends to jump at the end of trading days.
LSE trading data shows that different kinds of deals were responsible for the various price moves seen here.
|After prices gained all day the falls came at the end|
The Fresnillo falls were caused by another negotiated trade.
These price moves don't affect me but if they happened in the middle of the day they could have done if I was buying or selling products, like funds, that use share prices to value their units. On Friday, when I looked at my portfolio, my physical gold ETF shares were showing a gain for the first time in ages but the BlackRock Gold and General fund was still down 18%.
This didn't surprise me as the fund finds its price once a day at midday which is also when the units are bought and sold. So on Friday the price being offered was set at midday before gold miners across the world saw big gains on the back of the US jobs report.
So I checked a portfolio of companies from BlackRock's top ten investments (a Google Finance tool that I haven't mastered) to see how much the fund might have gained but there was no gain. It was level, despite companies like Randgold Resources making gains of up to 9% in other markets.
These across-the-board price drops look so uniform that I have forgiven myself for thinking that they me be orchestrated. They probably aren't but I will be asking the LSE and whether it can be sure that the price drops are not linked to other products that might use the pricing on the LSE.
In other words if this odd event happened at midday when BlackRock evaluates its fund, how would it affect an investor like me?
And would it be illegal to put in a huge BlackRock Gold and General fund buy order and then sell small amounts of Fresnillo, Randgold (or any other miner the fund holds) shares at knock down prices at midday. How difficult would it be for someone to do it?