Gold Stocks Set to Glitter
Source: Canada.com (8/5/07)
Canada's gold stocks may glitter in the weeks ahead if jittery investors seek a safe haven in producers of the precious metal.
The S&P/TSX global gold index closed the past week at 278.84, down slightly from 279.36 the previous week, but almost 10% above its year low of 254.04.
Spot gold edged higher on Friday to $673.00 an ounce, as traders said buying interest turned toward the metal. Friday's price was about $100.00, or 18%, above its mid-October low.
The rationale behind drilling into gold stocks stems from global economic trends including inflation, swings in currency and stock markets as well as fundamentals in the gold sector...
Speculation that the U.S. Federal Reserve could lower interest rates -- even as central banks in Europe and Japan head the other way -- could pressure the greenback further.
That may drive investors deeper into gold bullion, but also into gold stocks, which have underperformed lately and where profits are boosted by higher prices and production.