Gold miners rally as spot rate surge continues
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The news: ASX-listed gold miners were among the biggest gainers in afternoon trade as the spot price continued to track higher ahead of an expected interest rate cut by the US Federal Reserve next week.
The numbers: At 1:23pm AEST, shares in Regis Resources were up 5.2% to 28.5 cents each. Bellevue Gold (+5%), Westgold Resources (+2.8%) and Capricorn Metals (2.7%) were also performing well.
The spot price of gold meanwhile had lifted 0.49% to USD3,651.7 ($5,479.7) per ounce.
The context: UBS analysts said that the commodity rally is being driven by “expectations that the Federal Reserve will restart its easing cycle due to weak jobs data”, weakness in the US dollar related to rate cuts and geopolitical uncertainties.
They also flagged increased gold exchange-traded funds (ETF) inflows and lifted their estimate of ETF holdings to just above 3,900 metric tons by end-2025.
The analysts have a price target on the commodity of USD3,800 per ounce by December 2025 and USD3,900 per ounce around March 2026.
What they said: “The key risk for gold is if the Fed is forced to raise rates due to inflation-related upside surprises,” the research note reads.
The sources: UBS research, Bloomberg
