With the U.S. dollar under pressure, investors are flocking to gold as their preferred safe haven
As North American markets limp through declines not seen since February, investors are scurrying to park their money in a familiar “safe haven”: gold.
The yellow metal has undergone a mini rally since last Wednesday, when the Dow Jones Industrial Average shed more than 800 points amid a bout of global market skittishness.
Last Thursday, the price of gold jumped to US$1,227.60/oz from $1,193.40 and, after a small dip Friday, prices continued to rise Monday, surpassing US$1,230/oz as the Toronto Stock Exchange closed.
Canadian gold miners have seen their share prices soar as a result. Since markets closed on Oct. 9, Barrick Gold Corp. has seen its shares increase by 12.76 per cent to $16.52, while Kirkland Lake Gold Ltd.’s shares shot up by 12.15 per cent to $27.32. Goldcorp Inc, meanwhile, gained 9.41 per cent as its shares rose to $14.27.
Gold has traditionally offered investors an escape from the volatility of equities markets, said Jasper Lawler, head of research at London Research Group. Recently, however, its underperformance has seen investors turn to the U.S. dollar instead.
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