Stocks of gold miners such as Kinross Gold Corp. (KGC), Barrick Gold (GOLD), and U.S. Gold Corp. (USAU) are up 2% or more as the price of the precious metal hits an all-time high.
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Worries about global trade wars has boosted demand for gold, which is viewed as a safe haven asset, pushing the price up to a record high of $2,888.70 per ounce. The all-time high comes amid ongoing worries about trade wars under U.S. President Donald Trump, notably with China where tariffs of 10% have been placed on imported Chinese goods.
There are growing fears that the Trump administration’s tariffs will reignite inflation in the U.S. that could lead to a rise in interest rates. In times of economic uncertainty and market turmoil, many investors buy gold, treating the precious metal as a hedge against inflation and a reliable asset.
New Price Targets for Gold
The price of gold is also getting a boost as the value of the U.S. dollar softens after rallying following the U.S. election last November. Media reports say there is a rush to move gold from the Bank of England, where many central banks hold reserves, and deposit the metal with private banks.
Many analysts and investment firms expect gold to continue rallying to new heights this year, with analysts at Citigroup (C) becoming the latest to forecast that the price of gold will surpass $3,000 an ounce. The rise in gold’s price makes it more lucrative for mining companies to unearth gold, impacting their financial results and share prices in a positive way.
Is Barrick Gold a Buy?
Barrick Gold has a consensus Moderate Buy rating among 11 Wall Street analysts. That rating is based on seven Buy and four Hold recommendations assigned in the last three months. The average GOLD price target of $21.83 implies 25% upside from current levels.
