What’s Behind the Latest Rally in Gold Stocks?

Today, gold stocks are absolutely taking off. Top gold miners Barrick Gold (NYSE:GOLD), Newmont Mining (NYSE:NEM) and Harmony Gold (NYSE:HMY) have surged 8%, 5%, and 15% higher, respectively, at the time of writing. A number of gold indices are also higher, with the VanEck Vectors Gold ETF (NYSE:GDX), an exchange-traded fund (ETF) that tracks a range of gold miners, up more than 6% at the time of writing. Additionally, the SPDR Gold Shares ETF (NYSE:GLD), which tracks gold futures, is also up nearly 2% at the time of writing.

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Today, rising U.S. Treasury yields are the cause of concern for many investors. This morning, the U.S. 10-year Treasury yield hit 1.87%, before declining in afternoon trading. As inflation concerns pick up, gold is viewed as a market hedge relative to stocks. However, as the Fed hikes rates, real yields are likely to become less negative, something that is bearish for gold. Accordingly, the price of gold may stagnate, according to some experts.

That said, let’s dive into some of today’s news that’s driving gold stocks higher.

What’s Behind Today’s Rally in Gold Stocks?

A flattening yield curve and concerns about the economy have driven gold stocks markedly higher. The price of the yellow metal did appreciate today. However, the gains seen by many major gold miners and ETFs tracking gold have outperformed.

Essentially, gold appears to be a safe haven asset investors are focusing on. If more money flows into gold, these capital flows could result in further appreciation. For investors, this is a bet that looks worth taking right now.

In addition to today’s rising gold prices, Barrick Gold saw its stock price soar on the announcement of its full-year production results. The company grew its gold production to 4.44 million ounces, near the lower end of its guidance range. However, the company’s all-in sustaining costs are expected to drop over time, leading to higher profit margins, boosting investor expectations for this stock.

Other gold miners and indices tracking the gold sector surged on this news as well.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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The post Gold Stocks Alert: Rising Gold Prices Lift GOLD, HMY, GDX, GLD, NEM Stocks appeared first on InvestorPlace.

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Author: Chris MacDonald