Gold sell-off was a 'reset,' says Barclays — and these mining stocks could benefit from a rebound

Gold prices have undergone a "reset" during the Iran war, according to Barclays, which is anticipating a rebound as an end is in sight. Though spot gold rose 3.2% on Monday to $4,375 per ounce, its highest level since June 9, it remains over 20% below its January peak of over $5,589 per ounce. The war brought the metal's safe-haven status into question, as the prospect of higher interest rates made yielding assets, like bonds, more attractive. In a note published on Monday, Barclays wrote it remains constructive on gold, saying "persistent inflation, policy uncertainty and central bank reserve diversification" would boost prices in the medium term. The analysts said these factors should "reassert themselves," as a potential peace deal between Washington and Tehran is set to be signed later this week. "Our estimates suggest gold rises by roughly 5% for every 1% increase in the level of US CPI, leaving the inflation impulse from the recent energy shock an important part of the bullish case," they wrote. Gold's fall hit mining companies Since the war, the falling price of gold has lowered miners' revenues, and the oil and gas supply shock has boosted energy prices, raising their costs. Mining companies are among the most volatile stocks , typically acting as a leveraged bet on the gold price, rising during a commodities bull run and falling further during a sell-off. …