Mining stocks rally as gold hits highest level since mid-June (NYSEARCA:GLD)

Newmont (NYSE:NEM) and Pan American Silver (PAAS) are among the gold and silver miners enjoying the biggest gains Tuesday, +4.6% and +4.9% respectively, as gold climbed to the best level in more than six months and silver hits its highest intraday price since April.

February Comex gold (XAUUSD:CUR) closed +1.1% to $1,846.10/oz, with prices for the most-active contract ending the session at the highest since June 16, and March silver (XAGUSD:CUR) settled +0.8% to $24.236/oz after trading intraday high at $24.775/oz, the best in nearly nine months.

ETFs: (NYSEARCA:GLD), (NYSEARCA:GDX), (GDXJ), (IAU), (NUGT), (PHYS), (SIL), (SLV), (SIVR), (XME)

Other major movers include Barrick Gold (GOLD) +3.5%, Kinross Gold (KGC) +4.3%, Agnico Eagle Mines (AEM) +3.1%, Yamana Gold (AUY) +3.3% and Wheaton Precious Metals (WPM) +3.6%.

Precious metals prices gained despite a stronger dollar as traders focused instead on lower U.S. Treasury yields, while purchases by the People’s Bank of China are said to have raised hope among traders that some central banks might increase the share of their reserves allocated to gold.

Some analysts say the outlook for precious metals has improved; Saxo Bank’s Ole Hansen said he is “looking for a price-friendly 2023 supported by recession and stock market valuation risks – an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by year-end – all adding support.”

Eric Strand, manager of the AuAg ESG Gold Mining ETF, has predicted central banks will pivot on their rate hikes and become dovish during 2023, which will ignite a 2023 rally in gold of at least 20%, with miners outperforming gold by a factor of two.

Gold underperformed in 2022 but is “set to shine in 2023,” Gold Mining Bull writes in an analysis newly published on Seeking Alpha.