HomeMarket NewsGold Stocks Shine Bright, But Franco-Nevada Takes a Tumble

Gold Stocks Shine Bright, But Franco-Nevada Takes a Tumble

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A lump of gold on a stone floor


This week, the materials sector surged like a rocket, with the S&P 500 materials sector up an impressive +3.05% , and the Materials Select Sector SPDR Fund up +3.13%. This was partly due to the Federal Reserve’s remarks, which seemed to suggest they’re done pumping the brakes on the economy.

Chair of the Federal Reserve, Jerome Powell, indicated that they are trying to find a sweet spot between taking the punch bowl away too soon and leaving the partiers to make a mess. This suggests the Fed could start cutting rates to keep the good times rolling.

As a result, Comex gold (XAUUSD:CUR) shot up to their highest-ever settlement, securing a third consecutive weekly gain. Tensions in the Middle East added fuel to the fire, as the ceasefire between Israel and Hamas broke down, sending investors scrambling to the safety of precious metals, like a squirrel hoarding nuts for winter. DHF Capital CEO Bas Kooijman noted that this instability could keep investors on edge.

Additionally, the appeal of bullion received an extra boost, with benchmark 10-year U.S. Treasury yields slumping to a two-and-a-half-month low, lowering the opportunity cost of holding non-interest-bearing metal.

Meanwhile, benchmark three-month copper (HG1:COM) on the London Metal Exchange climbed to their highest levels in three months, driven by stronger-than-expected data from top consumer China and production disruptions caused by the upcoming shutdown of a major mine in Panama.

Among basic material stocks ($2B market cap or more), gold’s surge propelled the following to the top of the leaderboard:

  • Anglogold Ashanti (AU) +15.23%
  • Gold Fields (GFI) +12.18%
  • Eldorado Gold (EGO)+11.18%
  • Chemours (CC) +13.63%
  • B2Gold (BTG) +10%

On the flip side, here are the losers among basic material stocks:

  • Franco-Nevada (FNV) -4.10%; The gold company maintained its full-year guidance despite assuming no further contributions from the suspended Cobre Panama mine.
  • Suzano (SUZ) -3.90%
  • Sasol (SSL) -3.28%
  • CF Industries Holdings (CF) -1.99%
  • West Fraser Timber (WFG) -1.09%

Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).

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