Hedge Funds are stacking up and opening new short positions in metal mining sectors with new found enthusiasm. It seems the recent drop in gold and silver has worsened the existing bearish stance on the metal sector and new shorts in gold mining sectors are popping up. One of the reasons said for gold’s decline was the fear that Cyprus would sell its gold reserves which is ironic since gold lost $1 trillion over rumors of Cyprus selling merely $500 million worth of bullions.
TT International opened a new short position in 0.52 percent of African Barrick Gold PLC (LON:ABG) on Tuesday. The gold miner is based in Tanzania and operates several mines in the area and the new short bet is likely driven by the prediction of further decline in gold’s value. Barrick Gold Corporation (NYSE:ABX) (TSE:ABX), the world’s largest gold miner owns 73.9 percent equity interest in African Barrick Gold PLC (LON:ABG).
The freefall in gold prices witnessed last week, has slashed an estimated $169 billion off the market value of Barrick Gold Corporation (NYSE:ABX) (TSE:ABX) and NewMont Mining Corp (NYSE:NME) since gold peaked in 2011. African Barrick Gold PLC (LON:ABG) reported lower revenues and consequently decreased pre-tax profits in its Q1 earnings call today. ABG is down 14 percent since April 1. No other hedge fund has disclosed a short position in ABG in London.
TT International also increased short position in Nyrstar NV (EBR:NYR), a Belgian metal producer.
Petropavlovsk PLC (PINK:PPLKY) (LON:POG) which has been hit the hardest since gold’s plunge, was disclosed as short position of WorldQuant LLC. The shares are down almost 40 percent since Q2 kicked in. Petropavlovsk PLC (PINK:PPLKY) (LON:POG) is Russian gold miner. Moreover, Oxford Asset Management increased its existing short position in Petropavlovsk PLC (PINK:PPLKY) (LON:POG).
We reported hedge funds’ profiting from shorts in steel sector in Germany just a couple of days ago, now Marshall Wace has initiated a new position in EVRAZ plc (LON:EVR) which has a mining business in Russia and deals in the production of steel. Marshall Wace is shorting 0.52 percent of EVRAZ plc (LON:EVR) as of April 16, and the shares are down 7.6 percent already in two days.
EVRAZ plc (LON:EVR) released Q1 earnings today which reported a 11 percent rise in production of steel q-o-q. The company also said that it sees itself achieving production targets in the second quarter as well. Marshall Wace also took some profits in its short position in Lonmin Plc (PINK:LNMIY) (LON:LMI), a precious metals miner and refiner.
Odey Asset Management increased its short position in Kazakhmys plc (LON:KAZ) (HKG:0847), a leading copper miner and a producer of gold on a small scale.