Gold prices and gold stocks rallied Friday after Israel's massive strike on Iran's nuclear and military installations caused investors to run for safe havens. A couple of gold-mining stocks broke out above buy points.
The price of gold rose 1.6% to $3,456.30 an ounce in morning trading, to a record high, according to FactSet.
Among exchange traded funds, SPDR Gold Shares rose to an all-time high and was up 1% Friday morning. The ETF that tracks the price of bullion is trying to break out above the 317.63 buy point of a flat base. The Van Eck Gold Miners ETF is on track for its highest close since September 2012 — it's up 1.6%.
Among mining stocks, Barrick Mining rose more than 2% to new highs in heavy volume, topping the 21.11 buy point of a seven-week cup pattern. The cup may also be interpreted as the handle of a much larger base.
Canada-based Barrick has a 98 Composite Rating, according to MarketSurge.
Barrick stock has a 21-day average true range (ATR) of 2.49%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
Gold Stocks Make New Highs
Newmont climbed above the 57.16 buy point of a cup-with-handle pattern. But volume was light and shares were struggling to stay above the entry. Denver-based Newmont has a 98 Composite Rating and an ATR of 2.63%.
AngloGold Ashanti, a South African gold producer, rose more than 3% to the highest level since May 2011. Shares are now slightly extended from a flat-base entry at 46.90. AngloGold has a perfect 99 Composite Rating and a 3.45% ATR.
Agnico Eagle Mines is forming a cup-with-handle base and traded just 2% below the 126.65 buy point Friday morning, making it a gold stock to watch. The stock is an IBD Sector Leader.
Canada's Eldorado Gold is in buy range from a 20.65 buy point after climbing 1.4% Friday.
Both stocks have Composite Ratings in the high 90s and ATRs around 3%.
Analysts believe gold prices could stay firm for a while, as Iran retaliates and Israel plans continued attacks against Iran's nuclear program.
"Many investors may prefer to take risk off the table ahead of what could be a volatile weekend in terms of geopolitical headlines," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a research note.
