The gold price started the quarter at US$1 594/oz, but was boosted towards the end of the quarter by the announcement of quantitative easing 3 (QE3) from the USA, finishing at US$1 779 - the highest price of the year so far. The expectations that a loose monetary policy would continue to raise inflationary expectations, plus a low opportunity cost, continued to provide a basic support for the price.

The FTSE/JSE Gold Index itself rose 3.0% for the quarter, with mixed performance. AngloGold and Gold Fields both rose close to 5%, while Harmony fell almost 8% following a disappointing review of its Wafi Golpu project, combined with fears about its South African operations in the light of the increased industrial activity. The platinum sector suffered more from the industrial activity, with the index as a whole falling over 3% during the quarter, despite the better PGM prices.

The gold price started the quarter at $1 677/oz, and drifted down to finish below $1 600/oz by the end of the quarter. On a rand basis, the weaker rand slightly offset this fall. Although the US Federal Reserve didn't announce QE3, there was an expectation that some kind of monetary loosening will happen, maybe from the European Central Bank (ECB), and this will increase inflationary fears.

The Gold Index itself fell 2.2% for the quarter, with performance mixed. Anglogold performed the best amongst the heavyweights with a fall of 1.9%, while Harmony and Gold One both fell around 10%. The platinum sector performed substantially worse, falling 11.9% for the quarter.

The gold price started the month of March at a high and promptly fell by almost $150/oz due to comments from Ben Bernanke, Chairman of the US Federal Reserve Board (the Fed). Further comments and data appeared to stabilise the price between $1 650 and $1 700/oz.
The index itself fell 14.9% for the quarter, with the heavyweights bearing the brunt of the fall. The second tier gold shares generally held up significantly better. The Platinum Index fell by 4.3% for the quarter, with Impala under the most pressure due to uncertainties over Zimbabwe and the recent strike action.

Although there was a pullback in the gold price in December, the average for the quarter remained close to R440 000/kg, compared with the September quarter average of R392 000/kg. During December the rand gold price fell by 4%, while the Gold Index fell 11%, indicating some profit-taking for the end of the year. One of the many drivers of the gold price over the past decade has been the continuing weakness of the US dollar. With the USA now looking stronger than Europe at least, this may put a dampener on any price rises in the short term.

On the share front, heavyweight producers Gold Fields and Anglogold fell 8.7% and 10.7% respectively, with more marginal producer Harmony falling 16.9%. The best performances came from smaller producers Gold One (-4.4%) and Pan African Resources (-4.2%). The platinum shares generally performed a little better, with performances ranging from -1.8% (RB Plats) to -10.5% (Lonmin).