Gold, Silver Shares Climb, XAU Adds 1.9%

Gold and silver shares climbed alongside precious metals on Wednesday, as the Philadelphia Gold & Silver Index (XAU) rallied 1.9% to 214.26 in late morning trading.

The gains in precious metals equities came as gold futures inched higher to $1,787 per ounce, while silver rallied $0.44, or 1.1%, to $40.26 per ounce.

Strength in gold and silver was fueled by broad-based gains in commodities and a sell-off in the U.S. dollar against a basket of foreign currencies.  The U.S. Dollar Index (DXY) fell 0.5% to 73.619, largely due to a 0.4% rise in the euro to 1.4459 against the greenback.

Among gold producers, Yamana Gold (AUY) and Randgold Resources (GOLD) advanced 2.0% and 1.8%, respectively.  As for silver companies moving higher, Pan American Silver (PAAS) and Silver Wheaton (SLW) surged 4.1% and 2.2%, respectively.

Although news in the sector was particularly light on Wednesday, one gold miner making headlines Wednesday was Kinross Gold (K.TSX, NYSE: KGC).  Dundee Securities lowered its target price on K.TSX to C$20.00 from C$21.00 per share following Kinross‘ second quarter earnings report.

In the firm’s report, Dundee analyst Paul Burchell wrote that ” While we view the company’s new projects as accretive to shareholders, the increased capital cost forecast has led to a slight decrease in our valuation of Kinross – our net asset valuation (NAV) estimate drops to C$18.18/share from C$19.37/share.”

However, Dundee reiterated its Buy rating on Kinross, noting that despite the lower price estimate, “Kinross continues to trade at a discount to our NAV estimate, a situation we believe will reverse with continued strong operating results and the ongoing de-risking of the company’s development projects.”

Shares of K.TSX shrugged off the target price cut, rising 2.8% to C$16.42, while KGC jumped 2.9% to $16.80 per share.