Several gold stocks surged to six-month highs on Tuesday as the price of the yellow metal soared on rate cut hopes.
Spot gold prices rose almost 2% on Tuesday to finish at $2,466.90.
Prices were buoyed by Federal Reserve Chair Jerome Powell’s remarks on progress toward the Fed’s 2% inflation target, igniting hopes for monetary policy easing.
Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, ETR:NMM) shares gained 2.1% today to close at $48.32, while Barrick Gold Corp. (TSX:ABX, NYSE:GOLD) rose nearly 5% to end the day at $19.25 and Canadian-listed shares of Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) added nearly 2% to reach a new six-month high of C$32.53.
Powell's statements have led market participants to broadly anticipate interest rate cuts as early as September, with two more cuts possible by the end of the year.
The sentiment was reinforced by Tuesday’s retail sales data, which remained flat at 0%, strengthening the case for a September rate cut.
Comments from Fed governors Christopher Waller and Adriana Kugler later this week are eagerly awaited, as they may provide further indications that could influence gold’s trajectory.
"The asset could continue to find support as monetary policy easing materializes," said Quasar Elizundia, Research Strategist at Pepperstone.
Meanwhile, political developments in the US are adding another layer of complexity. The increasing likelihood of Donald Trump’s success in the upcoming presidential race could lead to higher Treasury yields, potentially dampening the gold rally. However, near-term election uncertainty may still benefit gold, with central banks' sustained demand providing additional medium-term support.
Other gold stocks that touched new 2024 highs included Canadian-listed producers Soma Gold Corp. (TSX-V:SOMA, OTCQX:SMAGF), Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) and TRX Gold (TSX:TNX, NYSE-A:TRX).
Developers US Gold Corp (NASDAQ:USAU), NV Gold Corporation (TSX-V:NVX, OTC:NVGLF), Spanish Mountain Gold Ltd (TSX-V:SPA, OTC:SPAZF) and Erdene Resource Development Corp (TSX:ERD, OTC:ERDCF) also saw significant gains on the day.