Rua Gold Inc. (CSE: RUA, OTC: NZAUF)
An Emerging Gold Explorer with Two Highly Prospective Land Packages in New Zealand’s historical gold fields.
On Friday, August 2nd (local time), as geopolitical tensions intensified and new data showed a weakened US economy, the price of gold surged past $2500 per ounce for the first time. Concurrently, gold mining stocks appear to be approaching a critical psychological threshold.
Spot gold saw a slight decline of 0.5% to $2,432.86 per ounce, reaching a high of $2,477.10, just a step away from the earlier this month historic high of $2,483.73.
Gold has risen approximately 3% so far this week, poised to achieve its best weekly performance since April. Meanwhile, the yield on the US 10-year Treasury note has dropped to its lowest level since December, and the US dollar index has fallen to its lowest level since March. Previous data indicated that employers added fewer jobs in July than economists had predicted, with the unemployment rate rising to 4.3%.
David Meger, Director of Alternative Investment and Trading at High Ridge Futures, stated, “The decline in yields, some safe-haven buying, and the notion of a weakened economy have led rates and the dollar lower, all supporting the gold market.”
Gold mining stocks seem to be approaching a crucial psychological tipping point. This niche area of contrarian investment has been overlooked for years, but it appears to be gaining renewed favor. As gold stocks become popular and traders increasingly chase them, their returns can dramatically increase.
From the last significant bear market low in the industry (late September 2022) to mid-July 2024, the VanEck Gold Miners ETF (GDX) has risen by 79.6%. However, based on industry standards, the gains could be much higher as traders return.
The stronger the upward momentum in gold itself, the greater the potential for a surge in gold stocks. As they rise higher, traders become more interested, deploying more capital. With gold stocks on the verge of a significant long-term breakthrough, a critical psychological tipping point may soon be on the horizon.
