Which Of These Mining Stocks & Gold Stocks Are On Your List This Week?
As world leaders and even celebrities gather in Switzerland for the World Economic Forum’s annual meeting, gold stocks will be a key focus for investors this week. Some reports have cited that some firms bullish on the global economy, however, there are certain riders that come with the optimism.
Why say this? The International Monetary Fund predicted the world economy will strengthen in 2020. That’s great and all but appears to be more of a “safe bet” statement than anything. Growth is good but keep in mind that the IMF also expects that growth to be at a slightly slower pace than it initially expected.
The Fund takes into account new trade tensions as well as the uprising in the Middle East to factor into “slower growth.” Obviously, in such situation mining stocks and gold stocks will be in the spotlight.
Slower Growth; Good For Gold Stocks?
The IMF further said that “Few signs of turning points are yet visible in global macroeconomic data. The risk of protracted subpar global growth remains tangible despite tentative signs of stabilizing momentum.”
In addition to this, BlackRock (BLK – Stock Report) Vice Chairman Philip Hildebrand said on Bloomberg Television, “Globally the big story is this extraordinary pivot by central banks in 2019.”
Given the case, it would appear that though there’s optimism for growth, it won’t likely be as aggressive as originally thought. Considering that this is a big year for the U.S. due to its Presidential election, more economic uncertainty could be in play.
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What that means is the case in favor of mining stocks and gold stocks could remain intact for the near term. With this in mind, here are a few gold stocks and mining stocks to watch ahead of the WEF meeting this week.
Mining Stocks to Watch: Vale S.A.
Last week, Vale S.A. (VALE – Stock Report) inched higher as shares of the mining stock hit highs of $13.70 in after hours trading on January 17. Market chatter began buzzing about the company. The main point of interest was Vale’s discussion on boosting majority ownership in Alianca Energia, a Brazilian power generation firm. According to Valor Economico, Vale may have also named Banco Santander as its adviser for the possible acquisition.
In addition to this, strong economic data out of China helped boost markets in Latin American countries including Brazil. “To a large extent, outflows have been a result of sweeping changes in Brazil’s economy as it adjusts to record-low local interest rates,” said Gustavo Rangel, chief economist, LATAM at ING. “A more supportive BRL environment should emerge gradually throughout the year.”
This new trend in Brazil could pose an opportunity for companies like Vale to emerge as market leaders. Continued focus on the company’s operations at its Esperanca mine has seen the company halt tailing operations to possibly carry out safety work.
The company has made a push to improve the site and as a result of halting things for the time being, things like Dalian iron ore futures jumped higher. Can this momentum continue into the week ahead?
Mining Stocks To Watch: Freeport-McMoRan Inc.
The next company on this list of gold stocks and mining stocks, Freeport-McMoRan Inc. (FCX – Stock Report) found itself churning sideways last week. However, optimism stemming from the mergers and acquisitions arena sparked more interest in the firm.
Earlier reports from gold mining company Barrick Gold (GOLD – Stock Report) show expressed interest by the miner in merging with Freeport. However, recent statements from the company suggest that the miner isn’t interested in strategic deals for the time being.
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This comes as J.P. Morgan analysts raised price targets on the stock. The firm boosted its previous target of $12 to $15. However, other analysts aren’t so convinced just yet. Credit Suisse cut Freeport to Underperform. The bank also dropped its price target from $11 to $10. This week Freeport will be in the spotlight as it reports earnings on January 23 before the market open. So that will surely be a point of interest for investors.
Gold Stocks To Watch: Fortuna Silver Mines
Don’t let the name fool you. Fortuna Silver Mines (FSM – Stock Report) has continued to drive value from increased gold production. Last week the company reported positive reconciliation of its reserves for its 2019 fourth quarter at its Lindero Mine in Argentina.
An estimated 452,000 tons of mineralized material was stockpiled in the fourth quarter. It averaged 0.58 g/t Au containing 8,400 ounces of gold according to the company. This represented 12% more gold ounces than initially predicted in the reserve block model.
Furthermore, the company was able to decrease its waste compared to original expectations. Of course, the company also produced significant silver output as well. Fortuna reported a full-year production of 8.8 million ounces of silver and 50.5 thousand ounces of gold or 12.4 million silver equivalent ounces. Thanks to this, the analyst community has remained bullish on Fortuna.
PI Financial held its “Buy” rating on the stock as well as its C$6.50 price target. Other analysts like Canaccord Genuity boosted targets. In this case, the firm raised its target from C$6 to C$7.
Mining Stocks to Watch: HudBay Minerals, Inc.
Finally, HudBay Minerals, Inc. (HBM – Stock Report) joins the list following a strong performance last week. On January 17, shares jumped from around $3.60 to highs of $3.81 before closing the week at $3.78. Though there hasn’t been much news this year from the company, its most recent January Presentation shows a few points of interest for investors.
First, its Manitoba operations have been in place for 90+ years. Furthermore, HudBay owns 2 of the top 20 greenfield projects in the Rosemont and Ann Mason areas. Specifically, the Ann Mason project in Nevada has the potential to enhance economics through exploration according to the company. Assuming this is the case, it may be important to keep tabs on any progress in the area.
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