By Aldo Svaldi
Brexit fears sent investors scurrying for safe havens, including gold mining shares, a rush that saved an index of Colorado stocks from another underperforming quarter.
The Bloomberg Colorado index, a price-weighted basket of 74 stocks based in the state, rose 3.4 percent in the second quarter. That outpaced a 1.4 percent gain in the Dow Jones industrial average, a 1.9 percent gain in the S&P 500 and a 0.6 percent gain in the Nasdaq composite.
The first part of the second quarter was about as close to business as usual for the markets since early 2008, said Garvin Jabusch, chief investment officer at Green Alpha Advisors in Boulder.
The end of the quarter was anything but normal, especially after U.K. voters unexpectedly voted to depart from the European Union. Global stock markets fell hard for two days before jumping back up and dusting themselves off.
Once the hyperbole wore off, investors realized they had overreacted, and started buying. But some also hedged their bets by holding onto gold-related investments.
“What you have in a Brexit is a symptom of the real risk, which is widening inequality,” said Jabusch.
Vista Gold, a gold developer headquartered in Littleton, saw its shares triple in price, making it the state’s top-performing stock in the second quarter.
Beyond renewed investor interest in gold, Vista’s 301.6 percent rise was driven by the company’s Mt. Todd gold project near Darwin, Australia. The mine, which is further along in permitting that other competing projects, has an estimated 5.9 million ounces of gold in reserves.