Gold Stocks & Gold Futures Inched High On Wednesday
This week has been an interesting one for gold stocks and gold futures alike. Amid concerns about the coronavirus, the U.S. Presidential impeachment hearings continued. However, on Wednesday the trial entered a new phase with senators getting the first crack to ask questions. They will be able to write questions down and submit them to Chief Justice John Roberts.
This has continued to put a strain on markets even as Apple (AAPL – Free Report) reported record figures. In addition, the Fed left rates unchanged for the time being. In a unanimous decision, the central bank rate-setting committee held the rate between 1.5% and 1.75%. Furthermore, officials have also signaled that they see greater risks of “surprises” that could force more rate cuts.
Gold Stocks & Gold Futures Hold
Following the Fed’s decision on rates, gold futures edged a gain in Wednesday’s session. This also takes into consideration the rising death toll of the coronavirus. It has now reached over 130 people as nerves shake on an impending global outbreak. More than 6,100 people have reported cases, worldwide. At the time of this article, gold futures have broken past the $1,575 mark.
Earlier this week we saw highs of $1,588 as the official top so far. However, this hasn’t been isolated to the futures market. A number of gold stocks have also seen a move higher. On Wednesday, shares of Hecla Mining (HL – Free Report) saw a dramatic reversal in January’s trend.
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Since the start of the year, one of the biggest gainers among gold miners consolidated. On January 28, shares hit 2020 lows of $2.87. This continued briefly on the 29th, however since around 10 AM EST, HL stock has managed to claw back nearly 5%.
Gold Stocks To Watch
Wallbridge Mining (WM – Free Report) also saw a sharp breakout in the market. The Canadian-based gold producer saw shares rebound from 2020 lows of C$0.77 and hit highs of over C$0.90 on Wednesday. Wallbridge is working to establish a project pipeline that can support sustainable 100,000-ounce annual gold production. This week the company announced new intersects with high-grade gold in its lower Tabasco Zone.
In response to the new findings, Marz Kord, President & CEO of Wallbridge said this “announcement continues to confirm the presence of significant high-grade gold mineralization in the Lower Tabasco Zone which remains open at depth and on strike.”
There were other gold stocks that saw strong momentum at the halfway point of the week. Ely Gold Royalties (ELY – Free Report) reached highs the stock hadn’t seen since 2010. The company has development assets focused in Nevada and Quebec. Furthermore, the company has a portfolio that includes 35 Deeded Royalties and 21 properties optioned to third parties. IMC International Mining (IMCX – Free Report) (IMIMF) has also pushed higher this week.
The exploration stage gold company hit highs of C$0.41 confirming a move so far this year of 64%. The company’s Bullard Pass property has attracted the attention of some larger miners in the past including Freeport McMoRan (FCX – Free Report) and others. Right now the company has staked 22 claims on the property and has staked additional claims to increase it to 171 claims.
Sustainable Move For Gold & Gold Stocks?
Gold Resource Corporation (GORO – Free Report) has essentially personified this idea. Over the course of the last few months, shares of Gold Resource has climbed from $2.73 to $5.52 this week. The company announced multiple ore grade intercepts from its maiden drill program at its “Scarlet” target.
“We are excited to see the first drill program at Scarlet return very encouraging results including twenty-four meters of over one-gram per tonne gold starting just one and a half meters from the surface,” stated Mr. Barry Devlin, Vice President of Exploration. This adds to the company’s operations in Mexico and Nevada.
As a number of gold stocks head higher, this begs the question of whether or not this will become a sustainable move. Honestly, that is up in the air right now. If concerns persist about the coronavirus along with the current rate decision, gold stocks could remain in their current trend. However, if impeachment hearings lead to a favorable outcome for the U.S. president, it could breed more optimism in the market. Though the move wouldn’t likely dramatically impede gold, it might not help it either. In that scenario, gold may remain in a sideways trend.
Considering this is an election year and there is still global financial stress, it will be interesting to see how gold fairs into the 3rd and 4th quarters. For now, sentiment has turned bullish.
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