Newmont Corporation (NYSE: NEM ) The stock fell as much as 3.3% as of 11:15 a.m. Monday as the conflict in the Middle East continued. Investors often buy gold as a safe haven during times of war — as they did this time. As the conflict continues, however, gold prices have turned south.
Stocks of gold miner Newmont Corp. followed them lower.
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Gold closed around $5,278 an ounce in February, according to data from TradingEconomics.com. Prices rose when US and Israeli forces began bombing Iran last week, hitting as high as $5,416 last Monday before falling.
At last report, gold was trading at $5,095 an ounce, down 1.2% from Friday’s close.
The story of silver is more complicated, and Newmont mines both gold and Gold and silver prices closed at $93.73 an ounce at the end of February before moving higher, rising to $96.10 a week ago. Like gold, silver fell again, but today it is up 0.2% to $84.53 an ounce.
Silver is still down 12% from its recent high, just 6% lower than gold. Thus silver has a lot of room for improvement.
Big picture time: The U.S. dollar index, which compares the dollar’s value to a basket of international currencies, has risen about 1.7% since the war began. A stronger dollar means you need fewer dollars to buy an ounce of gold. Thus, when the dollar rises, the price of gold (in dollar terms) falls.
Interest rates can also affect the price of gold. When interest rates rise, investors face a choice between owning gold, which doesn’t pay interest, and owning bonds, which do. Investors may sell gold to buy bonds, and when that happens – again – the price of gold falls.
That’s why Newmont stock is down today.
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