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Yesterdays surge in the price of gold continued today with a further 5.68% rise taking the price of the yellow metal to $1192 per oz. as the break out continued. In New York huge trading yesterday saw daily volume nearly double the average and the price is above the 200 day rolling average for the first time since May. All previous rallies have petered out at about $1170 at which level, traders sold but this time breakout has been achieved as the unexpected size of the rally took bears by surprise.
Excitement spilled over into gold mining stocks and a rampant Barrick Gold (ABX), the worlds largest gold miner, shot up by 9.5%, a 38% rise from the low reached on the 23rd September. Other miners to benefit included Goldcorp (GG)which had fallen to its lowest level since 1989 and also rose by nearly 10% yesterday and is now 25% up from its 2015 lows.
Anglo Gold Ashanti (AU) has risen by a massive 76% since the 5th August when it stood at its lowest for 16 years. Kinross (KGC) is up by 48% over the last month alone.
The trigger which caught everybody on the hop was September’s decision by the Fed, not to raise interest rates. The one cloud on the horizon is whether this reluctance will continue until the end of December. If US interest rates are raised before the year end, then, so it is argued, the rally will peter out.