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Gold stocks in SA set pace for best year since 2005

Gold Fields is the best performing stock, up 55% this year.

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% on Thursday morning, stretching its year-to-date gain to 40%. Gold surged to the highest in more than five years after the US Federal Reserve on Wednesday indicated a readiness to cut interest rates.

Read: Gold spikes to more than 5-year high as Fed signals ready to cut

The precious metal has rallied since late May as investors seek havens amid slowing global growth due to the fallout from the US-China trade dispute and as central banks adopt a more dovish tone. A report that Iran shot down a US drone added to Middle East geopolitical tensions — and to bullion’s allure.

Gold Fields is the best-performing Johannesburg gold stock, up 55% 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.

© 2019 Bloomberg L.P.

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