Newmont Corporation (NYSE:NEM), Barrick Mining Corporation (NYSE:B) and other gold and silver stocks fell in premarket trading Monday after gold prices dropped to their lowest level in more than seven weeks.
Gold fell below $4,200 an ounce, while higher oil prices fueled inflation concerns and strengthened expectations for further U.S. interest rate increases, according to Trading Economics.
Why Gold Is Falling
Brent crude oil rebounded after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz. Trump expects talks to resume this week, while Iran said it will not soften its conditions.
Rising energy costs tend to lift prices across the economy. UBS analyst Giovanni Staunovo said higher oil prices and rate hike expectations are “the main drivers behind gold’s recent weakness.”
Higher rates raise the opportunity cost of holding gold, which pays no interest, Reuters reported.
Fed Rate Hike Odds In Focus
CME’s FedWatch Tool showed a 70.3% chance of a Fed rate hike in October. The Fed raised rates by a quarter percentage point earlier this month. Cleveland Fed President Beth Hammack said Friday she is concerned that persistently high inflation could condition the public to accept elevated prices, according to Reuters.
Gold And Silver Stocks Premarket
| Company | Monday Premarket % Change | Monday Premarket Price |
|---|---|---|
| Newmont | -4.46% | $116.02 |
| Royal Gold Inc (NASDAQ:RGLD) | -3.96% | $242.49 |
| Coeur Mining, Inc (NYSE:CDE) | -5.67% | $18.13 |
| Anglogold Ashanti (NYSE:AU) | -7.99% | $91.12 |
| US Gold Corp (NASDAQ:USAU) | -0.40% | $15.53 |
| Barrick Mining | -4.29% | $41.04 |
| Agnico Eagle Mines (NYSE:AEM) | -4.48% | $185.76 |
| SPDR Gold Trust (NYSE:GLD) | -3.27% | $380.55 |
Other Metals And Market Views
Spot silver fell 4.8% to $61.17 per ounce, platinum fell 2.4% to $1,735.88 and palladium fell 2.2% to $1,239.60.
Saxo Bank analysts said much of the selling occurred during Asian hours and may reflect profit-taking by Chinese investors ahead of the Golden Week holiday, which starts Thursday.
Raphael Lamm, whose L1 Gold Fund has returned a net 235% since launching last year, called the decline “very temporary,” citing U.S. government debt above $40 trillion and growing central-bank allocations.
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