MARKET REPORT: Traders have a glint in their eyes as gold and silver prices shoot to their highest levels in years
Traders had a glint in their eyes yesterday as gold and silver prices shot to their highest levels in years.
A perfect storm of conditions has pushed both precious metals into the spotlight.
Gold rose almost 1 per cent to $1,856 an ounce – a nine-year high that drew it nearer to the record $1,921 it hit in 2011.
It was trading at $1581 at the start of this year.
Analysts are bullish about how the safe haven will perform over the next few months. Many think it could smash the $2,000 mark and the most zealous regard $3,000 as realistic.
The coronavirus-induced market turmoil, Sino-US tensions, low interest rates and massive stimulus programmes have turned traders into magpies.
While gold has been on a steady upward curve, silver has shot up in a more recent rally, surging as much as 8 per cent yesterday to $23 an ounce. It is up about 70 per cent since a trough in March. Silver is also seen as a safe haven but its use as an industrial metal has spurred hopes that it could be a winner in the ‘green recovery’ politicians promise will follow the pandemic.
The price surges boosted shares in Fresnillo by 9.6 per cent, or 102.5p, to 1171.5p. The Latin Americafocused miner cut its gold guidance for the full year because Covid restrictions hurt.
Gold production dropped in the most recent quarter – but silver production rose. Fellow precious metals miners Polymetal (up 2.4 per cent, or 40p, to 1707p) and Hochschild Mining (up 0.9 per cent, or 2.2p, to 257.4p) also enjoyed an uplift. Antofagasta, however, fell 0.3 per cent, or 3.5p, to 1033.5p after it dug up 8.4 per cent less copper in the latest quarter compared with the three months before.
And BHP fell 0.9 per cent, or 15.8p, to 1735.2p as the first day of an eight-day hearing began in Manchester that will determine whether or not a legal case focusing on the collapse of a dam in 2015 can be brought against it in the UK.
The FTSE 100 finished the day 1 per cent lower, down 66.63 points, at 6207.10. The FTSE 250 fell 0.21 per cent, or 36.10 points, to 17465.73.
Mid-cap private medical group Mediclinic rocketed 15.6 per cent, or 39.6p, to 293.6p after trading in Switzerland and the UAE, which represents more than two-thirds of revenue, rose in June compared with last year. Dame Inga Beale, the former head of the Lloyd’s of London insurance market, took over as chairman after yesterday’s annual meeting.
Mediclinic reckons things will only get better now lockdown is easing and people are flocking back for elective surgery procedures. At the other end of the scale, AIM-listed disinfectant maker Tristel tumbled after it said that demand for disinfecting surgical instruments, traditionally its main cash cow, had slumped since March.
It dropped by 9.7 per cent, or 45p, to 420p, despite predicting profits would beat forecasts because of a boom in demand for surface cleaning products.
Britvic, which makes Robinsons, J2O and Tango drinks, also lamented the pandemic.
Its turnover fell 16 per cent in the most recent quarter as ‘out of home’ consumption plummeted because bars, restaurants and cafes closed during the lockdown until around July 4. Shares closed 0.3 per cent lower, down 2.5p, to 795p.
Lorry group Wincanton rose 8.3 per cent, or 14.25p, to 186p after it surprised shareholders with the news that higher profits are on the way.
As well as an increase in demand through online shopping, it has clinched big contracts with the likes of Screwfix and Asda.