Make Kitco Your Homepage

Gold price story is not about a break higher, it's about about sustained profitability: BMO

Kitco News

Editor's Note: Get caught up in minutes with our speedy summary of today's must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

(Kitco News) Gold's current price action is not about a break higher, it is about sustained profitability, says BMO Capital Markets. "The story on gold from current levels is not about a break higher unless real interest rates go even more negative. Rather, it is about the sustained profitability that maintaining today’s extremely good gold price will bring to gold miners and refiners, providing them with greater optionality on capital management,” writes BMO commodities analyst Colin Hamilton. The correlation to watch is gold and real yields, according Hamilton. “Gold prices have dropped to a two-month low, not coincidentally as real yields pushed to a two-month high. In our view, this remains the key correlation to watch over the coming months for gold prices, particularly amid U.S. election risk,” he says. 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.