Why AngloGold Ashanti Rallied Today
Shares of gold miner AngloGold Ashanti (NYSE: AU) rallied 4.4% on Wednesday as of 2:06 p.m. ET. The gold mining stock got a lift as gold prices increased slightly toward the record highs reached briefly yesterday, while a Wall Street sell-side analyst increased his price target by a hefty amount.
One can think of AngloGold and its mining peers as leveraged plays on the price of gold. Gold, which tends to gain when inflation increases and/or geopolitical tensions rise, has taken off this year for a number of reasons. These include prospects for Federal Reserve interest rate cuts and geopolitical tensions arising after the disruptive tariff war kicked off on April 2, "Liberation Day."
This week has had no shortage of geopolitical tensions, including Israel's strike on Hamas leadership in Qatar, as well as the interception of Russian drones over the airspace of Poland -- a NATO member. Additionally, this week's Bureau of Labor Statistics' downward revision of jobs growth over the 12 months ended in March likely increased the odds of a Federal Reserve rate cut this month, which could be inflationary. Gold hit a record high yesterday before retreating later in the day. However, the price of gold was on the move higher again today, albeit slightly.
Source Fool.com
