Gold prices rallied yesterday and early today after the Department of Commerce said that core inflation in the US reached 1% in January, beating forecasts and boosting gold’s appeal as an inflation hedge.
In addition to that, the World Gold Council said that China’s gold demand soared 70% last year to 180 tonnes worth US$7 billion and that global demand for the yellow metal will remain strong this year.
Likewise, UBS (NYSE:UBS) was bullish on gold, hiking its one month forecasts for gold and silver prices from US$1,325/oz to US$1,375/oz and from US$25.5/oz to US$35/oz respectively, while its three month projection for silver was upped from US$27/oz to US$33/oz.
Gold last traded at US$1,386/oz.
Silver and platinum climbed to US$31.81/oz and US$1,834/oz respectively.
Gold producer Randgold Resources (LON:RRS), platinum miner Lonmin (LON:LMI) and silver miner Fresnillo (LON:FRES) declined marginally.
African Barrick Gold (LON:ABG) outperformed the sector, surging 3.7%.
Hochschild Mining (LON:HOC) climbed 18%, while other midcaps were in decline.
Aquarius Platinum (LON:AQP) dipped 2.7% and Petropavlovsk (LON:POG) posted a small loss.
Copper and gold focused explorer and developer EMED Mining (LON:EMED) was one of the top risers in the sector, rallying 16%.
Central Asia operating gold producer Anglo Asian Mining (LON:AAZ) surged 10%.