Gold Surges to New All-Time High to Cap Off a Bullish First Quarter
Stocks and Bitcoin aren’t the only things trading at all-time highs. Gold futures surged to a new all-time high price this week as the precious metal closed out one of its best-performing quarters in years. For the quarter ending March 31st, the price of gold added more than 8.0% which included a 9.0% gain in March alone. Over the past five trading days, gold prices rose by nearly 3.0% as investors seem to be forecasting a bit of a rockier road ahead.
Much of the uncertainty revolves around concerns over the Fed being able to rein in inflation. On Friday, the PCE and the core PCE reading for the month of February came in as expected, which should calm some investors. After a hotter-than-expected CPI in both January and February, many believed that inflation was back on the rise. Fed Chairman Jerome Powell has reiterated that the Fed is done with raising rates for the cycle and that any rate cuts will remain data-dependent. The original projection of seven rate cuts this year has now been downgraded to just three.
There has also been some noticeable weakness in equities in recent weeks. Although the major indexes sit at near all-time high prices, there are some cracks showing under the surface. Major tech stocks like Apple (NASDAQ: AAPL) are trading at multi-month lows and NVIDIA (NASDAQ: NVDA) finally put an end to its 11-week winning streak. Semiconductor stocks have noticeably cooled off and there has been a clear rotation away from technology.
With equities in a precarious position for the short-term, both investors and institutions are turning to gold as a safe haven. What is unusual is that gold continues to rise higher despite the US Dollar Index also being in an uptrend. It’s possible we could see some short-term pullback in gold with the PCE data coming in cooler. Still, it’s clear that gold remains in a strong bull market and in the current environment, it is unlikely that we have seen the peak of this rally.
For the week, gold COMEX June 2024 futures contracts settled at $2,254.80, while silver COMEX May 2024 futures contracts closed at $25.10.
Precious Metals Stocks and ETFs Weekly Performance
It has to be noted that despite gold soaring to new all-time highs, gold mining stocks have yet to catch a bid during this rally. While mining stocks are off their recent lows, they are still well undervalued compared to the price of gold. This may be one sector that we see a rotation to as investors take a breather from investing in tech.
The MIGL Gold Miners Index did perform well on Thursday before the holiday weekend. The index saw 19 of its 20 components trading higher with the only exception being Yamana Gold (NYSE: AUY). Shares of Barrick Gold (NYSE: GOLD) added about 5.9% for the week while Seabridge Gold (NYSE: SA) and Equinox Gold Corp (NYSE: EQX) also posted strong weekly gains.
A strong week from both the Van Eck Gold Miners ETF (GDX) and the Van Eck Junior Gold Miners ETF (GDJX) pushed their year-to-date gains into positive territory. The two gold miner ETFs added 6.25% and 6.43% respectively for the week. As can be expected, spot gold ETFs also soared to new 52-week highs as both the iShares Gold Trust (IAU) and the SPDR Gold Trust (GLD) gained more than 2.1% for the week.
The MISI Silver Miners Index was equally as bullish with 8 of its 9 components trading in the green during Thursday’s session. The lone exception was Compania Mina Buenaventura SA ADR (BVN) which fell by 0.81%. Silver continues to show strength alongside gold and is now sitting within reach of its 52-week high price.
What’s in Store Next Week for Precious Metals?
It’s all about employment next week as we get several key pieces of economic data. Included in this data are the JOLTS job openings report, the weekly jobless claims, and the February nonfarm payrolls. In between that, we will also hear another speech from Fed Chairman Powell and the ISM Services and Manufacturing PMI for March.