Precious metals mining shares jumped on Monday as the price of gold surged to yet more record highs.
On the FTSE 100, Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) rose 5.2% to 2,980p, and Fresnillo PLC (LSE:FRES) 4.4% to 2,376p, while on the FTSE 250 Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) leapt 9.1% to 343p.
This followed the gold price's ascent to $3,725 an ounce on Monday morning, up 1.2% on the day, rising $85 over a week, over $350 higher or 11% during the past month and rising from $2,650 at the start of the year.
Analyst John Meyer at SP Angel linked gold's surge this week to buying by ETFs jumping 800,000 oz since Friday, along with strong uptake from Indonesian buyers and a warning from hedge fund guru Ray Dalio about global debt pressure undermining major currencies.
Investors should hold 10% of their funds in gold, said Dalio at the FutureChina Global Forum 2025 on Friday, warning of a looming US financial crisis that he said might destabilise the monetary system and unsustainable government spending and borrowing.
Washington may need to issue $12 trillion in debt, said the Bridgewater founder, to cover deficits, interest payments, and maturing borrowings, creating a supply-demand imbalance in markets.
Dailo sees Trump’s latest tax-and-spend package as adding $3.4 trillion to debt with US debt reaching a tipping point, with France, Japan and China facing similar risks.
"Gold miners are playing catch up, having shrugged off the recent move," said Meyer, noting that the VanEck Gold Miners index jumped 5% on Friday, led by gains from Barrick, Newmont and Agnico.
US Treasuries sold off after the Federal Reserve interest rate cut, with Meyer pointing out that higher rates historically weighed on gold,
"However, we believe there are more significant factors at play in this gold rally with strong central bank demand, particularly in China.
"This trend seems to be spreading to Indonesia, where the government recently introduced bullion banks to store and manage gold.
"The removal of the Indonesian finance minister has seen the rupiah slump and local markets weaken pushing local buyers into safe haven assets."