(Bloomberg) -- It’s only June, but gold stocks traded in Johannesburg are already heading for their best year since 2005.
A South African index of bullion producers jumped as much as 6.1% on Thursday, stretching its year-to-date gain to 40%. Gold surged to the highest in more than five years after the U.S. Federal Reserve on Wednesday indicated a readiness to cut interest rates.
The precious metal has rallied since late May as investors seek havens amid slowing global growth due to the fallout from the U.S.-China trade dispute and as central banks adopt a more dovish tone. A report that Iran shot down a U.S. drone added to Middle East geopolitical tensions -- and to bullion’s allure.
Read more here about momentum for gold prices
Gold Fields Ltd. is the best-performing Johannesburg gold stock, up 54% in 2019. The rally has pushed the sector index close to technically overbought territory, with its 14-day relative strength index rising above 70, a level that suggests gains may be overdone, in all but three of the past 14 sessions.
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