Gold prices hit a two-year high today as the flight to safety continues amid concerns over Brexit.
After the relief rally last week, fears have returned to the market amid uncertainties over Britain’s future.
Gold being a safe haven asset has benefited from the flight to the safety. With prices now at two-year highs, the question is whether there is further upside in gold. Fundamentals certainly suggest there is further upside in the precious metal.
The Brexit worries not only boost gold’s safe-haven appeal, it also means that the U.S. Federal Reserve is not likely to hike benchmark interest rates anytime soon. This is another positive for gold, which benefits from the Fed’s loose monetary policy.
The multi-year high gold prices have also boosted shares of gold mining companies. Indeed, in mid-day trading Wednesday, shares of all major gold mining companies were higher. At last check,
Barrick Gold Corporation (NYSE:ABX) shares were up more than 3.7%, while Goldcorp Inc. (NYSE:GG) shares were up 0.80%. Year-to- date, ABX and GG have gained more than 200% and 70%, respectively.
Among the junior miners, one of the major gainers today is Glen Eagle Resources Inc. (TSX-Venture:GER). Based in Montreal, Glen Eagle is engaged in the acquisition, exploration and the evaluation of mining properties.
The company operates through three segments: acquisition, exploration and evaluation; development of mineral properties, and recovery of gold from tailings and recovery of gold from rocks.
GER shares are gaining momentum after the company announced that Cobra Oro has shipped on July 5 to NTR Metals in Miami $130,000 Canadian in gold and silver. The shipment represents production for the first three weeks of June. Approximately $50,000 worth of precious metals for the last week of June is still in the processing circuit and waiting to be smelted.
GER noted that it remains very focused and dedicated to expanding its production capacity by buying additional equipment which it expects to purchase shortly. The plant was built with the objective to increase production to 120 tonnes per day and the company plans to work assiduously towards achieving that goal by progressively ramping up capacity for the remainder of the year.
In Wednesday trading, GER shares gained 5% at $0.105. Volume was at 3,000, well below the average volume of 46,425.
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