Gold prices have slipped over the last week in response to a strengthening dollar and plans to restart the US economy.
According to a report by CNBC, gold prices have continued to fall since reaching a seven-year high last week amidst the ongoing coronavirus pandemic. Spot gold fell more than 2% over the weekend, reaching its lowest point since April 9.
Analysts are pointing to a rebounding dollar and President Trump’s commitment to restarting the U.S. economy as having an impact on the price of gold.
Michael McCarthy, chief strategist at CMC Markets, said,
Receding optimism (about growth prospects) is a factor I would normally expect to be supportive of gold prices, but we aren’t seeing that at the moment.
He continued, adding that it may have something to do with the “strength in the U.S. dollar, which hasn’t made a particularly large move, but is higher.”
While prices for precious metals have slipped, mining stocks have continued to rise in response to the demand generated for physical gold. Stocks of major mining operations like Newmont Mining (NEM), K92 mining (KNT), and Barricks Gold (GOLD) have performed significantly well over the past 12 months:
According to Zacks Mining report,
The Mining- Gold Industry has outperformed both the S&P 500 Index and the Basic Material sector in a year’s time. While the stocks in the industry have collectively advanced 40.7%, the S&P 500 has declined 4.6%. Meanwhile, the sector has slumped 25.8%.
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