Gold stocks and futures for Canada's main stock index rose on Friday following data showing the Chinese economy stabilizing. The Toronto Stock Exchange's S&P/TSX composite index closed up 0.40% at 17,484.77 on Thursday.
As a result, Canada's main stock index rose to another all-time high on Friday. The materials sector, which includes precious and base metals miners, gained 0.1% as gold prices rose and copper prices remained near eight-month highs.
Gold prices GCG20, +0.43% rose $9.80, or 0.6%, to $1560.30 an ounce. Gold futures gave up earlier gains to finish lower on Thursday. Gold for February delivery GCG20, +0.43% to settle at $1,550.50 an ounce, trading between a low of $1,548 and high of $1,558.20. Prices settled 0.6% higher a day earlier.
Gold futures gained about 20 cents higher compared to last Friday’s settlement, following gains for each of the last three weeks.
Gold found some support in a weaker U.S. dollar and benchmark government bond yields which look to end the week lower. As a result, gold produced a modest rise above a level at $1,550 considered support for the yellow metal. The sturdy bid around $1550/oz confirms the on-going demand for gold.
Following the recovery to this threshold, investors continue to show a healthy appetite for bullion, despite the general risk-on scenario. Barrick Gold gold stock was down 2.6% in early afternoon trading on January 8. Following a slow start in 2020, it remains one of the top producers in the world, and worth monitoring. Continued momentum for the spot price of gold will be good news for Barrick. Shares of B2Gold were down 3.6% at the time of this writing. Both stocks are still trading close to 52-week highs, but there is buy-the-dip potential to start the year.
Junior gold miners are putting a solid performance at the TSX and NYSE. The ongoing strategies of mining companies is a clear indication that the success of gold stocks is not short-term. The gold stocks of Yamana Gold and Wesdome Gold Mines are also on the right track.
A combination of low interest rates, recovering gold prices, and promising production results of junior mining companies make gold stocks a good investment in the first month of 2020.
For investors seeking a good hedge and high-yielding investment in the new year, gold stocks may be the right choice.