That positive sentiment ignited a bullion rally, with contracts for December delivery of gold surging $12.50 to close at $619.30 an ounce on the Comex division of the Nymex. The gold exchange-traded funds, iShares Comex Gold Trust(IAU Quote - Cramer on IAU - Stock Picks) and streetTracks Gold Shares , followed suit, both bouncing about 2% lately.
"One of the biggest positive things is that gold is breaking its linkage with oil," says Peter Spina, chief investment analyst at Goldseek.com, noting that the price for crude and the yellow metal for a time tended to move in tandem. Spot futures contracts for the oil were recently off 14 cents at $58.59 a barrel on the Nymex. In addition, "there is strong physical demand underlying the market, and momentum players seem to be re-entering," Spina says.
Rallying bullion prices were helping lift the mining complex, with shares of the
Market Vectors Gold Miner(GDX Quote - Cramer on GDX - Stock Picks) ETF, rising 0.8% recently.
Also on the move was rock-crushing giant
Newmont Mining (NEM Quote - Cramer on NEM - Stock Picks), which beat consensus third-quarter earnings estimates by a penny with income of 44 cents a share vs. forecasts of 43 cents. That compares to 28 cents earned in the same period of 2005. The Denver based company says it achieved sales prices of $615 an ounce for gold, vs. $435 an ounce in the third quarter last year. Expenses, however, also grew, with the cost to produce 1 ounce of gold reaching $318, compared with $236 in 2005.
Simon Constable
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