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Geopolitical concerns are working out well for gold miners.
Gold miners’ shares have advanced for seven consecutive days, their longest winning streak since August 2014 as investor anxiety supports gold prices.
The NYSE ARCA gold miners index, which includes nearly 50 names such as Barrick Gold and Newmont Mining, was up 0.8 per cent on Monday. The gains come as gold prices have climbed 3.2 per cent to $1,226.76 a troy ounce over that seven-day period.
Concerns about a possible currency war, following US President Donald Trump’s accusations that Japan manipulated currency markets to artificially weaken the yen, have also helped bolster gold prices.
“The acceleration of protectionism and ‘currency war’ chatter directed toward key trading partners should be seen as a catalyst driving the yellow metal to higher ranges,” said Rob Sica, director of global metals at TD Securities.
“The recent weakening of the [US dollar] and the realization that the GOP-controlled Congress may not quickly deliver on its key legislative agenda, following the delay of the Obama Care repeal and replace legislation, could drive gold up from the recent $1,198-1,225/oz range to $1,250-1,264/oz.”
Gold miners clocked their biggest annual gain since 2002 and their first annual gain in six years in 2016 — rising more than 50 per cent — driven by a jump in gold prices that came as companies’ focus on cost-cutting helped lift their margins. They have advanced more than 17 per cent so far this year.