When the White House imposed volatile trade policies that changed within hours or days, it hurt the U.S. dollar. Investors who dumped the currency and treasury bills bought gold instead.
Last week, Barrick Gold (GOLD) added 19.92% to close at $20.59. Nemont (NEM) gained 27.02% to close at $54.97. NEM stock topped the S&P 500 (SPY) for two straight days. At its highest in almost six months, investors are betting gold prices will rise further.
UBS set a $3,500 price target on gold. It has a $60 price target on NEM stock, implying another $5.00 upside ahead. UBS analyst Daniel Major thinks that the firm has operational momentum. Demand for gold will continue to increase as the U.S. dollar loses its position as the world’s reserve currency.
Newmont will likely outperform analyst expectations as it increases gold output. In addition, the firm demonstrated management discipline in divesting its assets. For example, since its Newcrest merger, it will receive around $3.2 billion in cash. Shareholders will get most of that cash back through a stock buyback program this year.
Your Takeaway
Gold prices show no sign of weakening. Volatile stock markets, driven primarily by uncertainties in tariff rates, will lift gold prices. Investors may hold ETFs like gold (GLD) or gold miners (GDX) to participate in the shiny metal rally.