Billionaire Hedge Fund Manager & Bridgewater Associates Founder Advocates For Gold Stocks
Gold stocks and other metals mining stocks have climbed this week even as the S&P reached fresh highs. Bridgewater’s Ray Dalio said in an interview at the World Economic Forum that “cash is trash.” He also argued over the base case against Bitcoin and how it isn’t stable enough to be a better store of value than gold. Though he did mention Libra could be a viable option if cryptocurrency is of interest.
Dalio argued the fact that gold has long been a reserve currency “for 1,000 years”. He also suggested that investors need to look beyond the next 12 months. There could be major shifts ahead like a new President. That’s regardless of what happens should Trump remain in office for another term. But most of all he emphasized the importance of diversifying portfolios with gold.
“I think you have to have a certain amount of gold in your portfolio…There’s two purposes of money, a medium of exchange and a store hold of wealth, and bitcoin is not effective in either of those cases now.”
Gold Stocks To Watch This Month
Whether you’re in physical gold or gold stocks, the market has seen an uptrend over the last year. Since 2019, the price of gold has continued to climb. This week we saw companies like Yamana Gold (AUY – Stock Report) and even B2Gold (BTG – Stock Report) hold the line after a slight sell-off in February.
Even beaten-down stocks like IAMGOLD (IAG – Stock Report) managed to push higher. The gold stock was crushed in 2020. It fell from $3.82 during the first week of the year to lows of $2.71 last week. Over the last 4 sessions, however, shares of IAG stock managed to bounce back. On February 11, the gold stock traded above $3 for the first time since the end of January.
Gold Stocks And Earnings Season
Looking ahead, there are upcoming earnings for several companies. Yamana discussed previously will report on February 13 so the countdown has begun. In the 3rd quarter, Yamana delivered an earnings surprise of 150% and has a trailing 4 quarter positive earnings surprise history.
Results have flourished thanks to strength from mines like its Jacobina and El Penon claims. Furthermore, higher gold prices could also help give earnings a boost. At the start of Q4, gold prices hovered around $1,480/ounce. By the end of 2019, those prices had climbed to highs of$1,529. This year we saw historic highs of over $1,600 which hasn’t been seen since 2013.
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Not Good For All Gold Stocks
Despite price appreciation for the majority of gold stocks, it hasn’t been bright for every one of them. Take Harmony Gold Mining (HMY – Stock Report) for instance. Shares have crumbled since the start of the year. From January 2, 2019, to January 3, 2020, the gold stock managed to climb over 100%. However since then, HMY stock has fallen by 30% to lows of $2.74 this week.
The company was recently selected to purchase AngloGold’s remaining South African Assets. Though terms of the deal weren’t revealed, the agreement is still being finalized. In another development, the company’s win, along with Newcrest Mining (NCMGF), obtained a dismissal from Papua New Guinea’s national court on work related to the Wafi-Golpu gold-copper project.
This now allows the two companies to resume permitting talks with the government. According to the company, at peak production, the mine could produce 320,000 ounces of gold per year along with upwards of 150,000 metric tons of copper per year. Despite these developments, shares continue to be under pressure in February.