However, following a “whatever it takes” mentality from global central banks and $2 trillion in stimulus in the US, the selling of gold has eased off and buyers are returning to the traditional safe haven. Month to date Gold is trading +2% higher.
Rising gold prices are beneficial for those firms that mine and produce gold. Rock bottom oil prices are also an important part of the equation here, reducing input costs. Higher gold prices and lower fuel prices mean wider margins.
Stocks to watch
Barrick Gold is already up 12% so far this month outperforming the broader UK market, which is down 15% so far this month. However, the stock is also up 25% from a six month low struck last week.
Barrick is by no means alone. Polymetal International’s share price has soared by 33% after plunging to a six-month low on 19th March.
Polymetal Int. levels to watch
Polymetal trades above its 50, 100 and 200 sma on the daily chart, a bullish chart which is a rarity in this market!
Immediate support can be seen at 1272p today’s low, prior to 1255p (50sma) and 1222p (100 sma).
Resistance is at 1330p (today’s high) prior to 1346p (yesterday’s high) and 1392p (high 24th March)