Shares of gold mining companies shot higher Monday as the price of the commodity jumped on record high crude oil prices and a weakening U.S. dollar.
Light, sweet crude for July delivery soared to a trading record of $139.89 before retreating to trade up $2.10 at $136.96 a barrel on the New York Mercantile Exchange.
Meanwhile, the greenback faded against two key currencies: The euro bought $1.5502, a sizable increase from $1.5354 late Friday in New York. The British pound rose to $1.9668 versus $1.9469 in New York.
Gold often gains during declines of the U.S. dollar as investors seek the precious metal's ability to act as an investment hedge.
In London, gold traded at $872 per troy ounce, up from $865.50 late Friday. In New York, gold for August delivery rose $20.10 to $890.40 per ounce.
Monday's gain in gold mining company shares comes after Thomas Weisel Partners analyst Heather Douglas on Friday initiated coverage of both Barrick Gold Corp., the world's largest gold producer, and Newmont Mining Corp. with an "Overweight" rating on the stocks.
Among her reasons for the "Overweight" rating of Barrick is "our positive outlook for the gold price by year's end," she wrote.
Barrick Gold rose $1.62, or 4.2 percent, to $40.17, Newmont Mining rose $1.55, or 3.3 percent, to $48.56, Gold Fields Ltd. rose 18 cents to $11.31 and Randgold Resources Ltd. rose 55 cents to $38.18.
Terms & Conditions
RSS Headlines
Fool UK