There was no turn around back down for gold and the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) prices as investors have proven so far unable to shrug off Brexit stress. Demand for the safe-haven asset built up further today as traders accumulated bullion to overcome potential economic and political uncertainties that stare at markets post-Brexit.
Gold likely to swing above $1,400?
Gold Futures for August delivery surged to 1,334.10 during Asian trade after gold booked its largest single-day gain since 2009 on Friday. Daniel Hynes, commodity strategist at ANZ, said that gold can further extend gains to breach $1,400 during the next couple of weeks. At the same time, the discounted outlook around any future rate hike by the Federal Reserve will also support bullion, added Hynes. Most analysts opine that Brexit will now prevent the Fed from imposing its targeted two rate hikes this year.
Gold rally boosts gold stocks
Among key investment banks, Goldman Sachs Group Inc. (NYSE:GS) has also revised its outlook on gold upward after reviewing the repercussions of Brexit. Macquarie Research upgraded its gold price target to $1,350 for the third-quarter, when it believes the real effect of Brexit will be felt by the market. Holdings in SPDR Gold Trust recorded a steep increase of 2% to 934.31 tons on Friday, which is its highest level since July 2013.
The rally in gold prices has been a big positive for gold mining companies, which are adding big gains. Some of the major gold stocks such as Barrick Gold Corporation (NYSE:ABX) and Newmont Mining Corp (NYSE:NEM) have become the biggest benefactors from the recent run-up in prices.
Seabridge Gold, Inc. (NYSE:SA) reported that it has initiated drilling with two core rigs at KSM Project, which is located in northwestern British Columbia. The drilling program is aimed to dig up to 10,000 meters of the core drilling, which can expand by another 800 meters.