"China and US lift global economy" was the banner headline this weekend for the Financial Times. While obviously bullish for the global economy, it is particularly so for gold and silver stocks such as Barrick Gold (NYSE: ABX), Goldcorp (NYSE: GG), and Wishbone Gold PLC (PINK: WISHY). That was shown by the exchange traded fund for gold, SPDR Gold Shares (NYSE: GLD), and the exchange traded fund for silver iShares Silver Trust (NYSE: SLV), both rising sharply for the week.
While SPDR gold shares was up more than 3% and iSharies Silver Trust jumped about 2.50% last week, it has not been that way for 2013. For the year, the SLV is off nearly 30%. Over the same period, the GLD is down more than 20%.
That has been registered in the performance of stocks such as Barrick Gold and Goldcorp.
For 2013, Barrick Gold is down more than 45%. Over the same time segment, Goldcorp is off by more than 30%. But both Goldcorp and Barrick Gold did very well last week in market action. Barron's recently had a bullish article on Barrick Gold. Wishbone Gold PLC also looks appealing, too, due to the recent developments.
The most bullish factor is the improving economic growth in China. As the world's second biggest consumer of gold, China drives much of the precious metals market, as it does for so other many commodities. As noted in the Financial Times piece by Ed Crooks, Ralph Atkins, and Jamil Anderlinj, "China's economy expanded by 7.8 percent...up from 7.5 percent in the previous three months..."
That is particularly bullish for Wishbone Gold PLC, which has substantial holdings in Australia. China and Australia have long had a rewarding commercial relationship focused around natural resources. With the Chinese economy growing, so will the demand for gold and silver, especially for firms like Wishbone Gold PLC that are ideally situated. Beaufort Securities recently recommended Wishbone Gold PLC, furthering the confidence of the investor community.
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