The market was abuzz once again this week as President Trump talked tariffs. Gold stocks glistened for most of the week. But on Friday, shares tumbled a bit after nonfarm figures came in above estimates. This year was great, in general for gold stocks and other mining stocks as prices for gold surpassed a previous $1,500 resistance level. Though that was earlier in the year, the facts remain, gold could be here to stay for a little while (or longer depending on who you talk to).
Gold has been widely looked upon as a hedge against economic volatility. Much of the global uncertainties stemmed around the US/China trade war. The trickle-down effect also caused concern across global markets as the United States brought more tariffs on other countries too. Interest rate cuts also helped boost gold prices throughout the year and could be a focus heading into the first half of 2020.
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Analysts have also remained relatively bullish despite short term consolidation amid things like these latest nonfarm payroll numbers. Goldman Sachs reiterated its bullish case for gold stocks. The bank said the precious metal may jump to $1,600 next year. So as gold prices persist in a bullish fashion, there are several gold stocks to watch.
Gold Stocks To Watch #1: Kirkland Lake Gold (KL)
This continues to hit gold stocks watch lists this month. Kirkland Lake Gold (KL Stock Report) is a Toronto-based company with several fundamental indications supporting its bullish momentum this quarter. The general earnings estimates for the company increase by nearly 14% according to Zack’s estimates.
The company also holds a positive earnings surprise history of more than 11% in its trailing 4 quarters. National Bank maintained its “Underperform” rating on the stock, however. It also cut its price target from C$50 to C$48. What’s held KL stock in the spotlight lately was its announcement to acquire Detour Gold. The company also feels that it can cut mining costs with this merger.
Gold Stocks To Watch #2: Agnico Gold Mines (AEM)
The next company on this list of gold stocks to watch, Agnico Gold Mines (AEM Stock Report) has soared this year. Since the start of trading in 2019, shares of AEM stock rallied by as much as 60%. After hitting highs of $64.88, the gold stock consolidated a bit to the low $50 range in October but has since climbed back above $60. The company recently applied for a $1 billion shelf registration, which hasn’t appeared to act as a concern to the market.
However, analysts are paying attention to the company. RBC has AEM at “Sector Perform” with a $61 target while National Bank gave its rating of “Outperform”. Agnico holds a positive earnings surprise history of over 240% for the trailing 4 quarters and while gold stocks declined Friday, AEM weathered the storm to finish the week only down slightly.
Gold Stocks To Watch #3: Franco-Nevada Corporation (FNV)
Shares of Franco-Nevada Corporation (FNV Stock Report) haven’t seen anything short of a monster year in 2019. Since the early days of January, FNV stock has jumped as high as $101.20. This 44% move came as gold prices pushed to new 6-year highs. Estimates for the company’s earnings moved up 8.2% over the last few months. Furthermore, the company has averaged positive earnings surprises of just under 12% in the trailing 4 quarters.
Considering the move that most gold stocks made on Friday, shares of FNV only declined about $4 per share. It also managed to close green from the open. Will that same momentum carry into next week? That may be up to what happens (or doesn’t happen) over the weekend. Now that nonfarm payroll figures are in the rearview, eyes will most likely focus back on the current state of the US & China as well as the Federal Reserve.
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