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Strong Investor Demand Driving Gold Prices Up

Gold miner stocks are fairly valued today, and Eldorado Gold is our top pick.

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Kristoffer Inton: Gold has rallied to more than $1,300 per ounce from $1,150 at the start of the year, but we see limited fundamental support for its rally.

Breaking a long trend, demand for gold jewelry in China and India has plummeted in recent years. But despite this massive decline in the largest single source of gold demand, prices have risen, largely due to strong investor demand. In the face of ongoing interest-rate hikes by the U.S. Federal Reserve, ETF holdings have risen to levels last seen in 2013. However, continued rate hikes threaten to reverse near-record ETF inflows, as still-manageable inflation would push real interest rates well above levels that attract investor interest.

Kristoffer Inton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.