STOCKSTOWATCHTODAY BLOG

In a world dominated by geopolitical uncertainty, tariffs and elevated public debt, it is no surprise that investors have flocked to haven assets like gold. That surge has directly benefited the companies pulling it out of the ground.

Gold continuous futures

surged past the $5,000 milestone Monday, jumping 2.2% to $5,088. The yellow metal has climbed 85% over the past 12 months.

Gold miners, in turn, have picked up the baton. In premarket trading,

SSR Mining

was up 5.5% and

Newmont

climbed 2.9%.

Freeport-McMoRan

a gold producer that is perhaps best known for mining copper, rose 4% to $62.80. The stock was just a few cents below its record closing high of $62.93, which it hit on May 20, 2008, according to Dow Jones Market Data.

Copper continuous futures

were up 1% to $6 a pound on Monday.

Higher gold prices typically increase mining companies’ revenue and margins. Looking ahead, expectations of a sustained gold rally look set to encourage even greater equity inflows into major miners.

“The combination of a softer dollar, persistent geopolitical tension and ongoing diversification flows away from U.S. assets continues to fuel the [gold] rally,” said Neil Walsh, head of metals at Britannia Global Markets.

With global financial markets already jittery on the back of recent foreign policy interventions by the Trump administration, growing fears of another U.S. government shutdown have amplified gold’s recent gains. 

Over the weekend, Democrats threatened to block a federal funding package—which expires on Jan.31—following the fatal shooting of U.S. citizen in Minneapolis by a federal agent. That could lead to a partial shutdown. 

As political uncertainty across the world persists, the price of gold— together with the share prices of major mining companies—look set to increase. 

Write to Alex Kozul-Wright at alexander.kozul-wright@barrons.com