Gold stocks got a boost Wednesday on what could be investor optimism that a four-week low in oil prices will have a positive impact on the margins of gold mining companies.
West Texas Intermediate (WTI) crude oil slipped nearly 2% from Tuesday’s closing price to US$68.14 per barrel currently.
Weakness in the crude oil markets comes as OPEC is set to meet on June 4 to discuss its own plans for production.
The gold price, meanwhile, continues to hover around the US$2000 per ounce level, likely supported by safe haven demand as uncertainty surrounding the upcoming debt ceiling vote by the US House of Representatives continues.
Falling US Treasury yields this week are also seen as aiding gold and silver stocks.
The VanEck Junior Gold Miners ETF (GDXJ), considered the benchmark for the performance of junior gold mining stocks, has slid about 5% over the past month, which might have prompted some speculative buying today as the overall outlook for the gold mining sector remains positive.
Big name gold producers were having a good day: Barrick Gold Corp. (TSX:ABX, NYSE:GOLD) had gained around 0.7%, while Newmont was also in the green at 0.3% higher and Kinross Gold and Agnico Eagle 1.5% and 0.9% higher, respectively.
But it was the mid-tier gold producers who were having a particularly strong day: Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) was up about 6%, New Gold around 4% and McEwen Mining also about 4% higher. Centerra Gold was up almost 10%, albeit on news that its Öksüt Mine had gained environmental approval from the Turkish government.
Among the gold stock developers, Troilus Gold Corp (TSX:TLG, OTCQX:CHXMF) was up 4% after revealing its summer 2023 exploration plans, while both Marathon Gold and Argonaut Gold saw a 6% increase.
