Gold whacked as Dow, S&P soar to new heights
Roaring global stock markets on Tuesday elbowed gold aside as the investment de jour, with the precious metal losing $20.30 an ounce from Monday's close.
Traders took on more risk as the fallout from Brexit assumed a calmer tone, reflected by the certainty of a new British prime minister, Theresa May, replacing David Cameron. In Japan, the re-election of Prime Minister Shinzo Abe on Sunday, also reassured the markets that Abe will continue his economic reform program known as "Abenomics", including more stimulus.
The result was a full-on bullish appetite for stocks in Europe, Asia, New York and Toronto. A day after the S&P 500 closed at record highs, the Dow Jones Industrial Average did the same thing, edging up 120.74 points to finish the day at 18,347.67 – the best performance since May 2015. The S&P also extended gains by a hair, adding 14.98 points to close at another record 2,152.14. In Toronto, the S&P/TSX composite index was also on fire, led by gains in energy stocks, as crude oil surged by around 4%. The top two Canadian oil sands producers, Suncor (TSX:SU) and Canadian Natural Resources (TSX:CNQ), each spiralled up a respective 2.59% and 3.71%.
Predictably, gold took it on the chin, falling 1.65%, as retail and institutional investors raced toward higher returns found in equities. Another factor was the yield on the U.S. 10-year Treasury note rising slightly from 1.43 to 1.5 percent as bond prices fell. 10-year yields were at an all-time low of 1.32%. Silver was also hit, though not as badly, with the white metal off 1%, to $20.20 at the close. A week ago gold hit a two-year high of $1,376.20, but the price has given up $32.54 as of Tuesday's close of $1,343.66.
Gold company investors should be poised to pick up some bargains tomorrow though, with most of the major gold miners on sale.
Here is a look at some of the day's losses, with a hat tip to Motley Fool for listing the Australian gold companies:
Barrick (NYSE:ABX) -6.44%
Goldcorp (NYSE:GG) -2.89%
Kinross (NYSE:KGC) -4.5%
Newmont Mining (NYSE:NEM) -2.68%
Anglogold Ashanti Limited (NYSE:AU) -4.32%
Newcrest Mining (ASX:NCM) -3.2%
Burey Gold Limited (ASX:BYR) -9.5%
Troy Resources (ASX:TRY) -6.7%
Orinoco Gold (ASX:OGX) -6.9%
Market Vectors Gold Miners ETF (NYSEARCA:GDX) -3.92%