Gold Prices Rise Sharply With Fall Of U.S. Government Bond Yields To All-Time Lows

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Gold Prices Rise Sharply With Fall Of U.S. Government Bond Yields To All-Time Lows

Gold prices and the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) rallied sharply in the premarket morning hours to two-year highs as concerns surrounding Brexit took center stage again. Gold for August delivery zoomed 1.25% to $1,375.50, reflecting a sharp rise in investors’ appetite for safe-haven assets and increased apprehension over a globally precarious monetary environment.

Gold appetite increased

Demand for gold surged after U.S. government bond yields touched all-time lows as Britain prerpared to leave the European Union. This also led a sharp sell-off in Sterling while gold priced in Pounds breached three-year highs. HSBC analyst James Steel, said that any extended gains in bullion are unlikely and believes that buyers can book profits if gold travels further north. Meanwhile, New York Federal Reserve President William Dudley added to optimism for gold after stating that a rate hike in the U.S. can be pushed back on account of low inflation and lack of clarity over U.S. economic prospects.

Barclays reduced Kinross’s earnings estimate

Analysts at Barclays lowered their projection for the earnings of Kinross Gold Corporation (NYSE:KGC). The revision can be attributed to the company’s muted performance in 2016. Analysts noted that Kinross had a rough start due to replenishment of ADR inventory, harsh weather conditions, and more-than-expected stripping. However, the research firm did mention the potential at the company’s mines in Nevada, Bald Mountain, and Round Mountain site. Barclays has assigned a ‘hold’ rating to the stock.

Barrick Gold Corporation (NYSE:ABX) Chairman, John Thornton, will now be assuming new responsibilities at Silk Road Finance Corp, an Asian investment company, noted the company’s press release.

Apart from this, Tahoe Resources Inc. (NYSE:TAHO) has bought 2% net smelter return royalty from Goldcorp Inc. (NYSE:GG) for $12.5 million. Both companies have also signed a letter of intent to scale up Tahoe’s stake in the Whitney Joint Venture to 100% while reducing Goldcorp’s current interest to a 2% NSR royalty.