Please ensure Javascript is enabled for purposes of website accessibility

Global Jitters Sends Harmony Gold Mining Co.’s Stock Up Double Digits

By Matthew DiLallo - Jan 6, 2016 at 11:24AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Gold miners rally along with the price of gold.

What: Shares of Harmony Gold Mining (HMY 0.30%) jumped 13% by 10:45 a.m. EST on Wednesday. That jump is largely due to a 1% pop in the price of gold to just over $1,090 per ounce after global fears sent investors scurrying for safe haven assets.

So what: A number of issues rattled the market on Wednesday morning including a reports of a successful hydrogen bomb test by North Korea, continued concerns of a slowdown in China, and more saber rattling between Saudi Arabia and Iran. These worries caused investors to sell off stocks, with most global averages down more than 1% in early morning trading.

Instead of stocks, some investors fled to gold, which sent gold stocks surging. Joining Harmony Gold in today's rally were larger producers Goldcorp (GG) and Yamana Gold (AUY 0.20%), which were both up roughly 4% Wednesday morning. The reason these gold stocks spiked is because higher gold prices leads to improved profitability from producers.

Should fears of a global economic slowdown either due to further weakness in China, or an armed conflict in the Middle East, or Asia continue to be stoked it could send the price of gold much higher in the near-term. Such a scenario would really benefit a gold producers like Harmony Gold, Goldcorp, and Yamana Gold, which have struggled under the weight of the sinking price of gold over the past year:

Gold Price in US Dollars Chart

Gold Price in US Dollars data by YCharts

Now what: The price of gold trades on fear, and lately the market has been spooked by both geopolitics and economic concerns. That said, should those fears abate it could quickly wipe out Wednesday's gold stock rally.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Harmony Gold Mining Company Limited Stock Quote
Harmony Gold Mining Company Limited
$3.31 (0.30%) $0.01
Goldcorp Inc. Stock Quote
Goldcorp Inc.
Yamana Gold Inc. Stock Quote
Yamana Gold Inc.
$4.88 (0.20%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.