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General Market Commentary
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Precious Metals
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General Market Commentary
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General Precious Metals
Mining stocks jump as gold price targets $1,300
On Tuesday, the return of the safe haven buyer and a weaker US dollar combined to lift the metal to its highest level since the election of Donald Trump on November 8.
Gold futures in New York for delivery in August, the most active contract, touched a high of $1,298.80, up more than 1% in heavy volume of more than 24m ounces, before pairing some gains in afternoon trade. Gold is up 12.8% so far in 2017.
Gold's recovery – up $80 an ounce in less than a month – was given fresh impetus from disappointing US jobs numbers released on Friday that hurt the US dollar and clouded the outlook for GDP growth in the world's largest economy. Mounting geopolitical worries including upcoming elections and terrorist attacks in the UK and an escalating row between Saudi Arabia and the tiny state of Qatar drawing in the US and regional powers provided further momentum.
Persistent economic weakness, political uncertainty, and a stock market on edge should keep gold well supported at this higher range in the near term
Analysts at Canada's TD Securities in a note released on Monday said investors continue to show demand for gold as an uncertainty hedge:
Going into a week that contains a testimony by James Comey, an election in the UK, as well as an ECB meeting, there are plenty of reasons for investors to keep gold in their portfolio. Indeed we have seen net positioning grow once again last week as longs continue to build, and shorts likely get squeezed out as gold grinds higher.