Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis
Overall, stock markets posted modest gains in breaking a three-day losing streak, with the Dow Jones Industrials (DJINDICES:^DJI) rising about 0.2%, while the S&P and Nasdaq had slightly better gains of 0.4%. But doing particularly well were the precious metals markets, which featured much better performance than stocks today, as gold recaptured all of the ground it had lost during the week.
As of 4 p.m. EDT, spot gold rose $26 per ounce, to $1,314, pushing back above the $1,300 level after dipping below it on Tuesday for the first time since July 19. Major gold miners Newmont Mining, Goldcorp (NYSE:GG), and Barrick Gold (NYSE:GOLD) all posted sharp gains of 8% and 10% on the day, as they essentially represent levered plays on gold prices even with their relatively attractive cost structures. Canadian-based Goldcorp and Barrick also arguably benefited from the rise in the Canadian dollar, which climbed almost 1% versus the U.S. dollar.
Silver prices jumped even higher on a percentage basis, with spot prices picking up $0.75, to $20.34. Hecla Mining (NYSE:HL) soared 11% despite posting a second-quarter loss in its earnings report this morning, as the company said it expects increasing gold and silver production as a result of the restoration of regular activity levels at its Lucky Friday mine in Idaho, which was closed for more than a year during 2012 and early 2013.
Platinum-group metals also joined in on the fun, with platinum soaring $49 per ounce, to $1,484, while palladium was up $14 per ounce, to $736. In earnings news, platinum-group metal producer Stillwater Mining (NYSE:SWC) reported a loss of $0.04 per share, but interim CEO Terry Ackerman blamed the loss on some one-time expenses related to accelerated incentive vesting and a recent proxy contest. With those two metals getting the bulk of their industrial use in the automotive sector, continued strength from automakers could support prices, even if gold and silver resume their recent declines. Stillwater rose 3% on the day.
Where will gold go from here?
Despite today's strength, the precious metals markets remain vulnerable to comments from the Federal Reserve and other central banks about the status of measures to stimulate economic growth. If accommodative monetary policy disappears, then it could create another leg down for gold and its white-metal counterparts.