Gold prices retreated from 23-month highs as the US Dollar (CURRENCY:USD) regained strength, prompting bullion traders to book profits. Gold Futures for August delivery fell 0.84% to $1,287.50 this morning, but have bounced slightly since.
Gold exposed to volatility
The yellow metal had made high above $1,300 an ounce at $1,315 yesterday, which marked its peak level since August 2014. However, the murder of a member of Parliament in Britain yesterday had forced bullion to shed gains in speculation that the Brexit vote may be postponed. HSBC analyst, James Steel, noted that gold will remain sensitive to shifts in market sentiment, exposing it to volatility. He added that change in risk perception among investors around Brexit referendum would dictate gold prices in the near-term.
Gold prices can get a boost if Britain decides to exit the European Union which will push the latter into recession, leading investors to take flight to safe-haven assets. Meanwhile, renewed optimism for bullion is reflective in GLD which recorded another increase in gold holdings.
BMO covers Sandstorm
In gold mining stocks, research firm BMO Capital Markets initiated coverage on Sandstorm Gold Ltd (NYSEMKT:SAND). In its research note, the firm assigned a ‘market perform’ rating to the stock while setting a price target of $4.50. Analysts mentioned that Sandstorm had been able to improve its risk profile in the recent past through various transactions. The firm finds Sandstorm’s diversification strategy to be effective, which is mainly responsible for the company’s outperformance over peers in the last year.
GSV Capital Corp (NASDAQ:GSVC) shared an update recently, according to which it is planning to increase its investment in Battle Mountain Gold Inc. In this direction, the company is contemplating to exercise 5,240,717 warrants that will translate into the acquisition of 5,240.717 shares of the company. The aggregate purchase price of the shares will be C$0.37 per share. GSV Capital is likely to exercise the warrants in the next five to seven business days.