Why Gold Fields Limited Stock Popped 9%
Shares of Gold Fields Limited (NYSE: GFI) stock surged to close 9.3% higher on Thursday. There wasn't any stock-specific news behind the shares' strength -- but there was news, period.
Gold prices spiked 1.3% higher on Thursday, one of their biggest share gains in recent weeks. By close of trading on the NYSE, gold prices had passed $1,260 per ounce, the highest price the shiny metal has commanded in nearly six months.
Gold bugs are pointing to everything from the Fed's Wednesday rate hike to the chance of a "hard Brexit" creating economic turmoil in Europe to explain the strength of gold prices. The one thing they seem to be sure of: Gold prices that are up more than 7% off their August lows ... are going to continue higher in 2019.
Of course, that's pure speculation. The hope that economic uncertainty will drive investors to buy gold as insurance against the risk of further stock market turmoil is a reasonable theory. But it's just as reasonable to guess that, with interest rates rising, investors will shift their savings away from stocks and into bonds instead. Or real estate. Or classic cars.
Simply put, gold isn't the only choice available as a safe haven from a stock rout. The only thing I can really say about stocks selling off is ... that it's making a lot of stocks a whole lot cheaper to invest in.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.