Canadian precious-metals stocks were in demand Tuesday as gold pushed to a fresh record high, buoyed by signs that China is seeking a larger role in the bullion market.
Traders drove gold higher after reports that the People’s Bank of China is courting central banks from allied nations to buy and store bullion through the Shanghai Gold Exchange.
Beijing already dominates supply and demand as the world’s largest producer and consumer. Extending its influence into custody services would mark a shift toward making China a central node in global gold flows.
For investors, the prospect of looser import rules and an expanded financial role for gold in China provides another tailwind to a market already supported by geopolitical unease and central-bank buying.
Canadian miners, typically seen as leveraged plays on bullion prices, were among the first beneficiaries, with shares in producers and explorers advancing on the day.
In afternoon trading, the yellow metal was up 1.2% at $3,785.97 an ounce.
Shares in B2Gold Corp. (TSX:BTO) and Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) were at the vanguard, each gaining around 4%. Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, ETR:NMM), meanwhile, advanced 2%.
Among the small-caps, Ascot Resources Ltd. (TSX:AOT, OTCQX:AOTVF), which poured its first gold in British Columbia's Golden Triangle, stood out with a 25% advance.
The explorers, including Arizona Gold & Silver Inc (TSX-V:AZS, OTCQB:AZASF), GGX Gold Corp. (TSX-V:GGX), Kainantu Resources Ltd (TSX-V:KRL) and Northern Superior Resources Inc. (TSX-V:SUP, OTCQX:NSUPF), were little changed.