Gold producer shares are tracking volatile global spot gold prices as the market seeks some direction on where the precious metal will head next.
The shares of Oceana Gold, New Zealand's largest producer, have in the past five days plunged 25%, from a high of $2.90 to a year low of $2.09, before regaining some value yesterday, trading up 5.7% to $2.20.
During the same period, global spot prices were at a high of $US1482 ($NZ1756) before falling 9% to a low of $US1348, but had since rebounded to trade around $US1392 yesterday afternoon.
Craigs Investment Partners broker Peter McIntyre said spot gold trading during the next fortnight would ''critical'', in determining whether it stabilises or falls further.
''Share prices have been reflecting the spot prices because none of the producers are hedged anymore,'' he said.
Some rallying in the US dollar's value, and easing of inflationary pressure on the US economy, had combined to undermine gold, which is traditionally sought as an investor hedge against inflation.
Mr McIntyre said most of the euro-zone countries, including many of those stricken with overwhelming sovereign debt, historically held large gold reserves.
''The markets are watching closely what happens to those reserves,'' he said, an example being Cyprus propping up bail-out funding with gold sales.
