Gold Extends Gains Hitting New All-Time Highs Midweek
As volatility remains in most major asset markets, gold continues to stand strong and once again pushed to new all-time highs this week.
Stocks showed signs of exhaustion this week as the S&P 500 and the Dow Jones Industrial Average snapped their respective six-week winning streaks. It might not have seemed like it since the tech-heavy NASDAQ made new all-time highs on the strength of earnings results from Tesla (NASDAQ: TSLA). The Volatility Index (VIX) remained high, even as treasury bond yields sank from recent highs. As we enter the weekend, we once again have the threat of Israeli retaliation against Iran in the Middle East keeping things interesting heading into the opening of futures trading on Sunday.
Gold hit a new all-time high on Wednesday as investors continue to pile into the safe-haven asset. Following its peak on Wednesday, gold sharply sold off into Thursday’s session as investors showed anxiety ahead of the US Presidential Election at the beginning of November. Despite this, gold managed to regain most of its losses by Friday, showing strong support at the $2,700 price level.
This market volatility is expected to last until after the election is finished. As of now, former President Trump holds a significant lead in the betting markets, but some mainstream media polls have Vice President Harris as the favourite. It is this uncertainty that is adding to what has historically been a volatile time for global markets.
Finally, Newmont Corp (NYSE: NEM) 's surprising miss on its quarterly earnings report shocked gold investors. The stock had one of its worst weeks in years, falling by more than 17% for the week. The weakness of one of the world’s largest gold miners was not expected, particularly in an environment where gold has been consistently hitting all-time highs all year long.
For the week, gold COMEX December 2024 futures contracts closed at $2,760.80 and silver COMEX December 2024 futures settled at $33.88.
Precious Metals Stocks and ETFs Weekly Performance
The Kitco MIGL Gold Miners Index sank mostly due to the midweek slump in the price of gold futures. The gold mining sector also had a bit of a sell-off thanks to the disappointing report from Newmont Corp. MIGL slipped lower by about seven basis points for the week, with a notable peak during Wednesday’s session. On Friday, just two of the twenty components in the MIGL finished the session in the green.
As mentioned, the big news in the gold miner industry this week was the earnings miss by Newmont Corp. The company missed on adjusted earnings despite reporting its biggest quarterly profit in more than five years. Shares of NEM fell by 17% for the week, erasing nearly half of the gains the stock has made this year. Despite this, Newmont received a price target upgrade from Raymond James to $66.00 and reiterated its Outperform rating for the stock.
Freeport-McMoran (NYSE: FCX) fell by nearly 4.0% for the week, bringing its October losses to nearly 10%. BHP Group (NYSE: BHP) and Rio Tinto (NYSE: RIO) also inched lower with modest losses amplifying the negative returns for both stocks in 2024.
Not surprisingly, gold miner ETFs were also dragged lower by the volatility in gold prices. The Van Eck Gold Miners ETF (NYSEARCA: GDX) fell lower by 5.0% this week, snapping its recent streak of gains. The Van Eck Junior Gold Miners ETF (NYSEARCA: GDXJ) dropped by 3.75% after gaining nearly 10% last week. Spot Gold ETFs were the lone bright spot in the sector. The iShares Gold Trust (NYSEARCA: IAU) and the SPDR Gold Trust (NYSEARCA: GLD) both inched higher by 0.2% for the week.
The Kitck MISI Silver Miners Index also retreated from its recent all-time high prices. The index fell by about three basis points to close the week and on Friday, only one of the nine constituents closed the session higher. The iShares Silver Trust (NYSEARCA: SLV) inched lower by about 1.67% for the week while major silver miners like Wheaton Precious Metals (NYSE: WPM) and First Majestic Silver (NYSE: AG) cooled off after significant gains during the prior week.
What’s in Store Next Week for Precious Metals?
With some retaliation already under way as of the time of this writing, we will once again be monitoring the situation in the Middle East.
Next week we also get the PCE and the Core PCE report for October as well as the key employment report for the month. On top of that, a majority of big tech companies are reporting earnings including Apple, Meta, Microsoft, Amazon, Alphabet, AMD, Visa, McDonald’s, Eli Lilly, AbbVie, Caterpillar, Starbucks, Mastercard, Merck, Exxon Mobil, Chevron, and Berkshire Hathaway.