Which Of These Are On Your List Of Gold Stocks To Buy?
There are no two ways around it: the U.S. economy and banking system could be signaling a bit of a slowdown in 2020. These are two very important indicators when it comes to planning any investment strategy.
Furthermore, they could be an indicator of whether or not it’s time to start finding some gold stocks to buy. Earnings season has just kicked off for the fourth quarter and full year of 2019. Banks lead the charge so far.
We’ve already seen 9 of the biggest in banking report financial results. Though they may have beat analyst expectations, the devil is in the details. In total, credit and capital raised for large companies fell by more than $300 billion during the year. Obviously, this can be a glaring indication of the new economic pace for growth or lack thereof in 2020.
What Causes Gold Stocks To Rise?
But why is this the case amid one of the best years for the U.S. stock market? Let’s take out the fact that we’ve seen some of the most active periods of buybacks in the stock market during recent times. And let’s also take out many of the “one time” events that many companies in the market saw. It isn’t surprising that there’s been a decline.
Lower consumer spending has become a general expectation by some of the large businesses that have seen financing decline. While some groups still see economies growing this year, that comes at a decreased rate than initially reported. We discussed this in our article, “Gold Stocks & Mining Stocks To Watch Ahead Of World Economic Forum.”
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With a low yield environment in play, slowing economies, and continued unrest with China and the Middle East, the scenario for bullish gold prices remains intact. So with this as the case, it could be a good signal to start identifying gold stocks to watch.
Gold Stocks To Watch
The economy in China is still undecided as to the direction it will head. It’s still growing at some of its slowest rates in over 25 years. On top of this, the Eurozone is dealing with much more than Brexit right now. France and Germany are showing signs of stagnation.
Taking all of this into consideration, it’s no wonder why some of the biggest names in finance are taking a protective stance when it comes to their capital right now. Increased gold demand in the short term may outpace supply in 2020. The instance of a deficit will likely help boost interest in gold at the very least.
However, as we’ve seen it’s not just interest but price that has received a boost. The per-ounce price of gold has already jumped to levels above $1,600 this year and currently holds above $1,550. This has helped a number of gold stocks over the last few months. Take DRDGOLD (DRD – Free Report) for example. The South African mining company recovers gold from treatment surface tailings.
Over the last quarter, the gold stock has attracted attention from the hedge fund community. At the end of the third quarter, DRD stock was in the hands of a few of such funds. These included Renaissance Technologies, Citadel Investment Group, Millennium Management, as well as PEAK6 Capital.
Diversified Gold Mining Stocks
Other companies like Sibanye-Stillwater (SBGL – Free Report) produce other metals than gold. The company mines palladium, platinum, and even rhodium from its claims in North America and South Africa. Sibanye produces between 775k-805k ounces of gold at all-in sustaining costs of $1,350 to $1,450 an ounce. In addition, platinum group metals yielded roughly 615k ounces with all-in sustaining costs of $755.
Given the climate for precious metals as it stands today, Sibanye has performed very well. This has been one of the best gold stocks to watch over the last year; even within the last six months.
Shares traded around $3.40 back in June and have since jumped to highs of $11.27 last week. SBGL stock continues to outperform sector peers and it’s no wonder why it has become such a popular name in mining as of late.
Almaden Minerals (AAU – Free Report) has also performed well over the last few months. Shares traded below $0.50 at times in November. Since then we’ve seen the gold stocks rally to highs of over $0.60. Last week, shares finished the Friday session at $0.58 on one of the biggest 1-day moves of the year so far.
In a recent filing, Almaden shows increased interest from bigger institutions. Tocqueville Asset Management L.P. upped its stake in the company. With current voting sharers totaling over 5.4 million shares, the firm now has 4.88% of Almaden. The company currently focuses on developing properties in North America with a particular target in Puebla, Mexico. Its main asset is the Ixtaca metals project on its Tuligtic claim.
Time To Buy Gold Stocks?
Other companies like Kinross Gold (KGC – Free Report) are focusing on expansion through acquisition. Considering the current price of gold and the current expenses to produce gold, it could be a perfect storm at this point.
Recently, Kinross announced the completion of its acquisition of Chulbatkan from N-Mining Limited. The deal was worth a cool $283 million in consideration. However, unlike the names mentioned above, this latest purchase expands Kinross’s operations into Russia. The high-grade development project is expected to have significant potential.
This deal adds to the continued trend in gold and mining stocks as of late. Big mergers and acquisitions, as well as strategic deals, have been seen over the last 18 months. Currently, Kinross expects just under 4 million ounces of gold indicated as well as roughly 80k ounces of gold in estimated inferred mineral resource for the project.
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