Gold stocks surge as markets tumble

Jacob Wolinsky ValueWalk

As stocks were crashing on Thursday, investors fled to the safe haven of gold. Gold stocks were among the day’s top gainers, as the gold prices hit record highs.

The price of gold rose more than 3% on Thursday, reaching an all-time high of $3,192 per ounce in midday trading.

Meanwhile, stock markets were in freefall, one day after posting massive bounce back gains. As of 1:45 p.m. ET, the Dow Jones Industrial Average was down more than 1,900 points, giving back the bulk of its gains on Wednesday. The S&P 500 was down 300 points, or 5.5%, while the Nasdaq was off more than 750 points, or 4.4%. The Russell 2000 dropped about 100 points, or 5.2%.

The markets completely ignored a strong inflation report, which saw the Consumer Price Index drop to 2.4% — its lowest level since September. Tariffs continued to dominate investor sentiment, as 10% tariffs went into effect for most trading partners while China was saddled with a huge 145% on U.S. imports.

Gold mining stocks having a golden day

The top stocks of the day were almost entirely gold mining stocks on Thursday, led by Harmony Gold Mining (NYSE:HMY), which surged 11.6% to over $16 per share.

Gold miner Gold Fields Limited (NYSE:GFI) jumped 9.3% to around $23.50 per share, while I Am Gold Corp. (NYSE:IAG) rose 7.3% on the day to around $7 per share.

Orla Mining (NYSE:ORLA) was also among the day’s 10 best gainers, rising 8.2% on Thursday to approximately $10 per share.

AngloGold Ashanti (NYSE:AU) was also having a strong day, rising 7.4% to $39 per share, while Agnico Eagle Mines (NYSE:AEM) rose 6.6% on Thursday to $113 per share. Further, Alamos Gold (NYSE:AGI) jumped 6% to $28 per share.

Leading gold ETFs were also surging, led by the SPDR Gold Shares (NYSEARCA:GLD), which increased 2% on Thursday and has gained 20% YTD. Also, the VanEck Gold Miners ETF (NYSEARCA:GDX) jumped 5.5% today and is up 41% YTD.

Rising gold prices are a huge catalyst for the gold mining stocks. But with gold prices expected to rise to $3,300 or $3,500 per ounce by the end of the year, more investors are buying, as are central banks for gold reserves, creating more demand.

While individual gold mining stocks are cyclical and varied, a great way to tap into the gold market is through diversified ETF.

Also, it should be noted that by 2:30 p.m. ET, the indexes had come back a bit, with the Dow off around 950 points, the S&P 500 down $165, and the Nasdaq sinking 640 points.

Author

Jacob Wolinsky

ValueWalk

Jacob Wolinsky is the founder of ValueWalk, a popular investment site. Prior to founding ValueWalk, Jacob worked as an equity analyst for value research firm and as a freelance writer. He lives in Passaic New Jersey with his wife and four children.

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