Market report: Gold and silver price jump makes Polymetal a FTSE 100 winner

One of this year’s hottest FTSE 100 stocks continued to shine on Wednesday after reporting a big jump in earnings on the back of surging gold and silver prices.

Polymetal International may not have been on too many radars at the start of the year, but those investors who did take the plunge have been rewarded with a near doubling in the value of their stakes.

The group has nine active mines producing gold and silver in Russia and Kazakhstan, including its “world-class” Kyzyl mine.

With the gold price soaring above $2,000 an ounce, Polymetal has been increasing its production at just the right time. The depreciation of the Russian rouble and Kazakh tenge has also helped to offset Covid-19 costs and higher mining taxes.

Adjusted earnings surged 53% to $616 million, allowing the company to double its interim dividend to 0.4 US cents a share. The stock drifted 18p lower to 1934p in the wake of results, compared with just above 1000p in March.

The wider FTSE 100 index, meanwhile, remains close to the 6,000 threshold despite the S&P500 and Nasdaq setting new records last night.

Wall Street optimism will be tested this weekend by the Jackson Hole Symposium, when central bankers, economists and corporate bosses share their hopes and fears in a virtual conference.

The FTSE 100 index stood 0.84 points lower at 6,036.17, with BP and Royal Dutch Shell both down by 1% as Hurricane Laura bears down on key refining facilities on the US Gulf Coast.

Carnival was 21.2p higher at 998.4p, even though it announced the cancellation of more cruises scheduled for the start of next year.

Island Princess had been due to sail from North America on a round-the-world voyage, while plans for Pacific Princess to circle South America have also been shelved. The Miami-based company blamed current limitations on border and port access and restrictions on airline travel.

Elsewhere, Peel Hunt recommended buying Gym Group shares ahead of next week’s interim results, even though the low-cost operator is set for a loss due to its estate being closed for most of the period.

The broker said it was possible the company has “retained the vast majority of its members, is trading profitability and could make a full and reasonably swift recovery”. Peel has a price target of 300p, which compares with 153.8p following a rise of 1.6p today.