Gold made a comeback today after the Federal Reserve cleared the air around the probability of rate hike. The central bank kept the Federal Funds target rate unchanged at 0.25%-0.50%. But, the announcement that sparked the rally in the yellow metal was the shift in the Fed’s tone about the number of proposed rate hikes this year to two from four.
Rate hike pushed back
SPDR Gold Trust (ETF) (NYSEARCA:GLD) is up another 0.4% this morning after climbing by 2.5% yesterday. This level is close to gold’s peak in 2016 so far. Now the markets are expecting the Fed to implement the next rate hike in September despite beliefs that a June hike is not out of the question. In other commodities, Silver Futures for May delivery too jumped 3.39% to $15.730
In mining news, Sibanye Gold Ltd (ADR) (NYSE:SBGL) has been downgraded by Macquarie to ‘Underperform’ from ‘Neutral’. At the same time, Kinross Gold Corporation (USA) (NYSE:KGC) has been successful in doubling its value over the last two months. One reason for the rally in the stock is the acknowledgment that it received by two firms, TD Securities Inc. and Scotiabank, on top of a general rally in gold stocks since December.
These two firms helped Kinross to a successful closure of its public offering, which followed the exercise of underwriting option in full and improved gross proceeds to $288 million. The funds will be utilised towards a debt reduction program and boosting the company’s balance sheet.
Meanwhile, Barrick Gold Corporation (USA) (NYSE:ABX) announced that its Senior Vice President of Global Exploration, Rob Krcmarov, will be promoted to the position of Executive Vice President of Exploration and Growth, thereby becoming a member of the company’s Executive Committee. Krcmarov comes with 30 years of experience in both exploration and geology.
Harmony Gold Mining Co. (ADR) (NYSE:HMY) too received a revised rating outlook by Macquarie, which has downgraded it to Underperform from Neutral.