It has been a good day for gold stocks so far.
Spot gold jumped as much as 1% to a fresh record of $US4,186.78 in Asia-Pacific trading, edging past its New York peak of $US4,179.70.
The S&P/ASX 200 rose 0.8% to 8,970, and is on track for its best session in two weeks despite pulling back from an intraday four-day high of 8,989.9. Market breadth was firm, with about 138 gains to 56 declines. There were 16 new 52-week highs against just two new lows within the top 200.
Gold producers led the advance, with Newmont Corporation (NYSE:NEM, TSX:NGT, ASX:NEM, ETR:NMM), Northern Star Resources Ltd (ASX:NST), Regis Resources Ltd (ASX:RRL), Capricorn Metals Ltd (ASX:CMM) and Genesis Minerals (ASX:GMD) posting fresh records.
On the small cap front, West Wits Mining Ltd (ASX:WWI, OTCQB:WMWWF) had gained 3.13% at time of writing on news from Qala Shallows. Titan Minerals Ltd (ASX:TTM, OTC:TTTNF) was 14.74% higher after it welcomed a major strategic investor. Astral Resources NL (ASX:AAR) had gained 13.27%.
“The surge has been fuelled by strong investment demand amid geopolitical tensions, dollar weakness, US Fed cut expectations, and equity and bond market risks,” the World Gold Council said.
“Physically backed gold ETFs have added 634t year-to-date, with holdings just 2% below their 2020 peak, but the current accumulation phase looks nascent compared to previous historical periods. Gold ownership does not appear saturated, but the rapid price increase may raise near-term risks.”
Since the US-China trade flare-up on Friday and Fed Chair Jerome Powell’s dovish comments on the US rate outlook overnight, gold has rallied 5.2%. Year-to-date, gold is up 60% and silver 85%, making precious metals the best-performing asset class so far this year.