Global uncertainties push gold, producers to fresh highs www.mining.com
Gold prices built on last week’s gains and hit another 2.5-month high in early US trading Monday, boosting producers’ shares for the seventh consecutive day — the longest winning streak since August 2014.
Higher gold prices boosted producers’ shares for the seventh consecutive day — the longest winning streak since August 2014.
April Comex gold was last up $9.70 an ounce at $1,230.50, as investors — led by hedge funds —continue to flock to the yellow metal looking for safe-haven assets. Last week, gold prices rose more than 2% to score their biggest weekly percentage advance since June, according to data from Dow Jones.
The price jump has benefitted producers of the precious metal, with the NYSE Arca gold miners index, which includes nearly 50 names such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM), up 1.6% on Monday. In the last seven day, the index has gained more than 8.5%.
Gold bears are betting that a US President Donald Trump administration will lead to strong US economic expansion, higher interest rates and a stronger dollar. Higher interest rates (after adjusting for inflation) boosts the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing and investors have to rely on price appreciation for returns.
Global uncertainties push gold, producers to fresh highs
But that narrative has begun to unwind as Trump's swift action on US trade deals began to hurt the dollar and worries about the broader geo-political impact of a Trump administration, a hard Brexit and key elections in Europe mount.
His first week in office has already shaken the markets with news of the US withdrawal from the Trans-Pacific Partnership, Trump’s renewed promise to build a wall on the Mexican border as soon as possible, and his attempts to ban more than 218 million people from seven Muslim-majority countries from entering the US, which was blocked Friday by a federal judge.
Published Date:2017-02-07