SPDR Gold Trust (ETF) (NYSEARCA:GLD) and corresponding gold prices held onto gains for a seventh consecutive session today, near to 28-month highs. Bullish outlook for the yellow metal confirms the growing appetite for safe-haven assets even as Asian markets witnessed a rebound.
Upbeat economic data in the U.S. improved the sentiment towards equities. Report from Supply Management showed that U.S. service sector activity recorded seven-month high in June, driven by new orders and increased employment. Futures for August delivery was seen trading 0.10% higher at $1,368.45.
Jobs data to be released in U.S. will be key for investors, particularly after May hiring added to dismal outlook. Meanwhile, markets have already priced in the likelihood of delayed rate hike by the Federal Reserve due to shocking Brexit vote. RBC Wealth Management’s, George Gero, stated that the contracts on Comex have jumped to a record high during the year.
Miners benefitting from rally
HSBC analyst, James Steel, hold the view that gold will continue to march higher, however, profit booking activity is also likely to surge in coming days. Meanwhile, continued buying interest in bullion has turned out to be excessively generous for mining companies such as Barrick Gold Corporation (NYSE:ABX), which are seeing their stock prices advancing to new levels with each passing day.
Deutsche bank upgraded its rating for Kinross Gold Corporation (NYSE:KGC) to ‘hold’ from ‘sell’ alongside raising its price target to $4.50 from $3.10. Rating upgrade came in response to the company’s phased approach towards expansion. Kinross has concluded $250 million bought deal last year, which followed a $610 million transaction in Nevada.
Apart from this, Sandstorm Gold Ltd (NYSEMKT:SAND) updated about the successful completion of bought deal financing. In this transaction, the company recorded sales of 12,921,400 common shares at $4.45 per share, fetching proceeds of $57.50 million. Sandstorm will use the proceeds towards lowering its revolving credit facility as well as the acquisition of gold and other metals.