Surging Gold Prices Drive South African Mining Stocks to Record Gains
Providing a strong buffer for the country’s benchmark index against the volatility engrossing global markets, the surge in Gold prices has moved South African mining stock to their best monthly performance in record. Marking its largest monthly gain since Bloomberg tracking in 1995, an index of South African mining companies surged 33% in March. This major performance helped the FTSE/JSE All share Index post a 3.1% gain for the month. Which reflects emerging-markets peers, including the U.S. equities.
Actually, Gold producers have been leading this surge, including Harmony Gold Mining Co., as well as Sibanye Stillwater Ltd. Notably, two of South Africa’s largest miners, each soaring 48%. These stocks emerged as the top performers in the benchmark index. Additionally, DRDGOLD Ltd. and AngloGold Ashanti Plc also ranked among the best performers.
Driven by central bank buying and its appeal as a safe-haven asset, Gold has regained investors favours this year after hitting multiple records. In fact, Wall Street banks, including Goldman Sachs Group Inc., predict even better gains for the metal. Hopefully pushing prices to $3,300 an ounce in the morning months. According to Lester Davids, and analyst at Unum Capital Ltd., this outlook could turn into profits “well in excess” of previous years for Gold miners.
“Gold miners are known to have fixed costs, meaning that as Gold prices rise, their profits can increase exponentially,” David explained.
A Shield Against Global Market Turmoil
Back in March, the South African benchmark has exceeded the 0.4% gain in MSCI Inc.’s index of emerging market equities. In dollar terms, the South African gauge added nearly 5%, contrasting sharply with the nearly 6% decline in the S&P 500.
Moreover, nearing $3,150 an ounce last Tuesday, Bullion prices continued their upward trajectory, and heading for a fourth consecutive day of gains. Furthermore, investors remain on edge as President Trump prepares to announce sweeping tariffs on all of America’s trading partners last Wednesday. This raises fears of retaliatory measures and further market uncertainty.
Micheal Brown, a senior research strategist at Pepperstone Group Ltd. Said:” I remain happy to ride this momentum wave to the upside, with Bullion’s salad days unlikely to come to an end any time soon.” “The rally isn’t quite indestructible, but the bulls continue to believe in their soul for now” He added.
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