Mining Stocks Rally as Gold Advances to Highest Level Since June
Comment of the Day

January 04 2023

Commentary by Eoin Treacy

Mining Stocks Rally as Gold Advances to Highest Level Since June

This note from Bloomberg may be of interest. Here is a section:

Kinross Gold and Pan American Silver are among the gold and silver miners getting the biggest boost Tuesday, as gold rose to the highest in six months.

Gold rose 1% to trade over $1,840 an ounce as the precious metal continues to gain momentum
The Bloomberg Americas Mining Index gains as much as 3.2% led by Kinross’s 7.5% rise and Pan American’s 7.4% climb, Newmont climbs 3.7% and is one of the top performer in the S&P 500 Index

Other miners rallying include: EQX CN +11%, ARIS CN +10%, SVM CN +4.3%, BTO CN +3.3%, ABX CN +3.8%, FR CN +2.8%, LUN CN +3.9%, YRI CN +3.1%

Eoin Treacy's view

The gold price rallied in tandem with bonds yesterday, despite the relative strength of the Dollar. That suggests at least a temporary reorientation of investor focus towards the view gold is a perpetual zero-coupon bond. The implication is inflation has peaked and could easily surprise on the downside and the lagged effect of central bank tightening becomes clear in Q2/Q3.

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