2 Mining Stocks To Watch In Q1 2020
You can’t deny the amount of global uncertainty there is in the market right now. One of the classes that historically benefits are gold stocks. As a commodity, gold is bought as a store of wealth. It can also act as a hedge against riskier sectors.
So it makes sense that between 2019 and 2020, these have caught more attention from investors. With the precious metal up about 20% over the past year, do gold stocks truly present an opportunity to make money?
Supply and demand have a big hand in this topic. Low demand, high supply equates to lower prices in general. High demand, low supply historically results in the opposite. Similarly, if there’s fear in the market, gold may be a logical choice as the past 100 years have shown.
Some say 5% and others say 10% or more is a good portion to direct to gold in one’s portfolio. At the end of the day, that figure is up to the investor themselves. In today’s market climate, we’ve seen a few gold and mining stocks that have started to climb this week.
Mining & Gold Stocks To Watch: Freeport McMoRan
Shares of Freeport McMoRan (FCX – Free Report) saw a turnaround in trend on January 28. After falling from highs of $13.64, the mining stock seemed to have been in freefall until this week. On, Tuesday, FCX stock recovered by nearly 4%. Concern over the coronavirus began to take the spotlight once again.
As far as Freeport is concerned, new developments revealed in a Reuters piece suggest that the company does, in fact, look forward to new deals. Earlier this month the company said that it isn’t looking for strategic deals in the coming years. However, now, Freeport’s CEO, Richard Adkerson said that he would consider acquisitions, mergers or other deals once the company’s 3 ongoing expansion projects are complete. That takes the timeline out to roughly 2022 for now.
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“We don’t have a clear directive now on what that direction could be, but we will be attractively situated and will have an opportunity to add value through investments,” said Adkerson in an interview on Tuesday.
Mining & Gold Stocks To Watch: Sibanye Gold
Similar to Freeport, Sibanye (SBGL – Free Report) recovered after a period of freefall over the last few weeks. After hitting highs of $11.27, the gold stock dropped to lows of $9.65. Tuesday saw shares recover by roughly 3%. What helped in this recovery?
In this case, it could be a matter of diversity. What I mean by this is that other than gold, Sibanye also mines other things like platinum. Right now Rhodium prices are surging. Since its a by-product of platinum mining, it makes sense Sibanye has benefited from this momentum. With industrial consumption of the metal set to continue, it is widely expected that rhodium will break $10,000 per ounce sometime in 2020.
Furthermore, the company is also expanding on projects in South Africa. Sibanye has environments and ministerial approval for the first 50-megawatt module of its planned power plant. “The mainly photovoltaic solar projects would generate power for the miners’ own use,” according to the Minerals Council.