Interest rate expectations and encouraging economic data are keeping gold prices higher
Gold prices are on the move again, solidifying gains after second-quarter gross domestic product (GDP) showed upwardly-revised growth. Combined with the near-certainty of an interest rate cut from the Federal Reserve at the central bank’s meeting next month, the safe-haven asset has been flying high, up over 22% in 2024. Gold miners Barrick Gold Corp (NYSE:GOLD) and Newmont Corporation (NYSE:NEM) are enjoying the tailwinds as well.
Barrick Gold stock was last seen up 2.3% to trade at $20.31, just a chip-shot from its Aug. 20 two-year high of $20.88. The shares are up 14% year-to-date and have gained 22% this quarter alone.
Options seem to be affordably priced. The equity’s Schaeffer’s Volatility Index (SVI) of 29% ranks in the relatively low 18th percentile of its 12-month range, meaning options traders are pricing in low volatility expectations right now.
Newmont stock is 2.5% higher to trade at $53.13 at last check, and earlier hit a multi-year high of $53.30. The shares have carved out a channel of higher highs since briefly breaching $30 on Feb. 28, and are now up 30% in 2024.
While calls outpace puts on an absolute basis, Newmont’s 10-day put/call volume ratio over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 98% of annual readings. This means puts have been getting picked up at a quicker-than-usual clip lately. Given only a slim 1.6% of NEM’s total available float is sold short, some of this activity could be due to shareholders protecting paper profits against any unexpected downside risk,
