Gold Prices Surge As These Gold Stocks Continue To Rally
As far as gold stocks are concerned, there’s no stopping the yellow metal at the start of 2020. While the broader markets make new highs, gold has also surged in a major way. For the novice, it may be unclear as to why gold surges as stocks head higher. They’re supposed to move opposite of each other, right? Not necessarily and that has a lot to do with general market fundamentals.
During times of extended market gains, gold will move in lockstep. Since the precious metal’s used as a hedge, investors may be buying gold stocks while trading others. In the event that the market tanks, gold would likely hold value as a hedge. But if markets head higher, gold traditionally holds support. Are there outliers to this, of course. In general, however, these are some of the basics to understand.
Aside from this, the new year has seen gold futures maintain a bullish stance. Since New Year’s Eve 2019, these gold futures have climbed from $1,517 to $1,534 on Thursday. And investors who didn’t buy gold stocks in 2019 might be feeling the regret right now. This move now has many more analysts observing. John Roque of Wolfe Research said in a Barrons article, “If we think about it in percentage terms, to imagine gold making a new all-time high sometime in 2020 doesn’t seem like such a stretch.”
Gold Stocks To Watch
So this begs the question of gold stocks to watch this year. Which will be best and how can you make money with gold and mining stocks in this climate? The sector is realizing strong inflows of capital right now as futures are within striking distance of new 52-week highs. As it stands today, this level sits at $1,566.20 reached back in September. You’ve also got to factor in this is an election year. This could bring its own volatility to the market.
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“There will be a lot of volatility in markets ahead of the elections, and that will be helpful for gold,” says Rohit Savant, director of research at CPM Group.
B2Gold Corp (BTO) (BTG)
B2Gold (BTO)(BTG) has seen an impressive rally since late August of 2019. Starting the new year, shares of BTO stock continued to climb and are also closing in on levels it hasn’t seen since November o 2018.
The company announced positive year-end exploration drill results for its Fekola property and Anaconda area. This included positive infill drilling of its Fekola Inferred Mineral Resource. In the most recent analyst actions, the company’s received a higher price target from National Bank. It raised its target from C$7.50 to C$8 while Raymond James maintains a C$6.25 price target for the gold stock.
Kinross Gold (K)(KGC)
Shares of Kinross Gold (K)(KGC) have also rallied for most of 2019. On Jnauary 2, 2020 the gold stock continued its move to highs of $4.86. This is still quite shy of last year’s highs. But new developments from the company could clue the markets into the type of plan it has for 2020.
In December, the company reported that it secured a $300 million debt financing. The company plans to use the funds for its Tasiast operation in Mauritania with the IFC (a member of the World Bank Group), Export Development Canada, and with the participation of ING Bank and Société Générale.
We are pleased to have signed the loan agreement, which is indicative of the support from a multilateral lender, an export credit agency and two international banks for our Tasiast operation. The completion of this facility underscores the attractive foreign investment climate in Mauritania,” said J. Paul Rollinson, Kinross President, and CEO.
Yamana Gold (YRI) (AUY)
Another top gold stock to watch in 2019 was Yamana Gold (YRI)(AUY). Shares reached levels on January 2 that Yamana stock hasn’t seen since late 2016. Thanks to the rise in gold prices, it’s become one of the best performing gold stocks.
The company recently revealed a 25% dividend increase in December. The increase was to $0.05 per share annually and would become effective in the first quarter of 2020.
As far as analysts are concerned, Yamana continues to impress. Raymond James has a Market Perform rating on the stock with a $4.50 price target. National Bank wasn’t as impressed by the gold stock. It recently cut its price target from C$6 to C$5.50.
Regardless of this, the case remains strong in favor of gold stocks for the time being. Whether that upholds later in the year is to be seen. However, considering the election year and the rising gold prices, it will be a sector to keep an eye on.
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