Gold stocks were higher today on hopes that interest rates may not be hiked in the near future and a potential ending to the Iran war.
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The VanEck Gold Miners ETF (GDX) was up 5.90% today with major holdings Agnico Eagle Mines (AEM) up 5.29%, Newmont Mining (NEM) up 4.53%, and Wheaton Precious Metals (WPM) up 5.46%.
The spot gold price was 2.65% higher at $4,638.10. The edge back closer to the magical $5,000 mark was helped by comments from Federal Reserve chairman Jerome Powell that interest rates are positioned well enough that the Fed could take a “wait and see” approach to the recent oil price spike.
There had been concerns that higher oil prices as a result of the Iran war would lead to higher inflation and the need for interest rates to be hiked to combat that.
Stable interest rates are better for the gold price than rising ones. Higher rates increase gold’s holding costs and tend to result in weaker gold prices.
Also helping the gold price and related stocks were hopes that President Trump might be looking to wind down the Iran war. He has reportedly expressed a willingness to exit the war before the Strait of Hormuz is reopened.
That might be acceptable to the U.S., but would still leave quite the oil headache for other countries such as the U.K. and France.
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