Jaguar Mining and Rubicon Minerals Shares Surge as Federal Reserve Announces Stimulus Plans
NEW YORK, NY -- (Marketwire) -- 09/18/12 -- Gold stocks have been on an impressive run as of late as prices for the precious metals have surged due to the potential of economic stimulus from central banks across the globe. Gold prices reached a 6-month high last Thursday after the Federal Reserve announced stimulus for the U.S. economy. The SPDR Gold Trust ETF (GLD) has gained nearly 10 percent in the last month. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Jaguar Mining Inc. (NYSE: JAG)(TSX: JAG) and Rubicon Minerals Corp. (NYSE: RBY).
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Gold prices in August saw its largest monthly gain since January when gold prices rose by 15 percent after the Fed announced it would keep interest rates near zero till late 2014. The Federal Reserve announced on Thursday that it would purchase $40 billion of mortgage-backed securities a month, and would keep the benchmark interest rate low till at least mid-2015. Year to date gold prices are up 13 percent.
"The price of gold will do very well in the years to come," said Axel Merk, Merk Funds chief investment officer.
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According to a recent report from Thomson Reuters GFM, gold purchases from central banks in 2012 will total 493 metric tons, an increase of 7.9 percent. Central banks have expanded reserves to diversify from the dollar and protect themselves from a potential gain in inflation.
"The demand side is all about worldwide debasement of currencies and gold being seen as an alternative," GoldCorp's CEO Chuck Jeannes said on Sept. 10. "We see it with central banks buying gold and we see it with investors buying gold to protect themselves from the exposure to currencies that they don't have confidence in."
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