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New 52-Week Highs Are In Site With These Gold Stocks

If you’ve been following gold as close as we have, you’ve seen gold stocks inch higher for days. On Thursday, the price of gold reached record 7-year highs amid global uncertainty. As much as some may want to blame it on the Democratic debates, the fact remains that global economies are in no better shape today than they were a few weeks ago. With this being the case, it’s no wonder why gold is soaring this year.

[Report] Gold Stocks Have Investors Scrambling As Billionaires Go From Cash To Gold

The World Gold Council Outlook 2020 issued a report in January that identifies a number of factors that could push gold even higher. After the latest comments from the Fed, it could suggest more underlying catalysts in favor of bullish gold stocks. First, the Gold Council cited that the economic conditions put in place over the last few years support a bullish stance on gold the most. This is in reference to the extremely low-interest rates we’ve all become accustomed to.

top gold stocks to trade right now

“Gold should perform as a convex macro asset market hedge, resilient during ongoing risk market rallies but a better hedge during sell-offs and vol spikes,” analysts at Citi led by Ed Morse, said.

Citi Says $2,000 Gold Price Isn’t Out Of The Question

Reports from Citi this week suggested that the firm believes higher gold prices are in store for investors. Market “jitters” could bring investors to put more money into safe-haven assets. Obviously, gold would be a potential way for investors to hedge risks to the downside.

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In the short-term, Citi increased its 6-12 month target on gold to $1,700 per ounce. In addition, it gave a 12-24 month outlook of $2,000/ounce. That would mean record gold prices altogether. This same sentiment was discussed by one of our writers earlier this week following the Fed minutes. This includes commentary on certain economic indicators like declining earnings growth. According to research from Refinitiv, corporate earnings climbed 22.7% in 2018. But earnings growth was much less in 2019 despite record market levels — an estimated 1.1%.

“With STIR [short-term interest rate] markets pricing in ~1.5 Fed cuts in 2020 and global growth risks skewed to the downside, gold is a direct beneficiary of the low nominal and negative real yield environment.”

Ed Morse, Citi

Gold Stocks Hitting New Highs

While a number of indicators are factoring into more reasons to buy gold stocks, companies are hitting new record trading levels this week. Here’s a list of gold stocks reaching new 52-week highs today:

NAMESYMBOL52-WEEK HIGH
Barrick Gold Stock(NYSE: GOLD)$21.31
Yamana Gold Stock(NYSE: AUY)$4.60
B2Gold Stock(NYSEAMERICAN: BTG)$4.67
NovaGold Stock(NYSEAMERICAN: NG)$9.61
Equinox Gold Stock(NYSEAMERICAN: EQX)$9.87

While momentum investors have targeted short term trends in gold stocks, there’s an interesting situation in play right now. That “situation” is the fact that gold and the stock market are both hitting record levels. The typical trend we’d see is a flee from broader market shares and into safe-haven gold stocks along with physical gold.

However, while markets etch historic gains, some banks are throwing out warning signals. Goldman Sachs is concerned about widely held stocks including FANG. The bank told clients that there could be a near-term correction where the market could slide “at least 10% from its peak” and is “looking much more probable.”

The bank cites the same things we did in regard to the disappointing earnings growth and implications of the coronavirus. Furthermore, Apple’s surprise update on lowered revenue growth has aided in this idea of a potential, near-term correction on the horizon.

“Any weakness to [FANG stocks] and other companies would likely push earnings estimates lower,” wrote Peter Oppenheimer, the firm’s chief global equity strategist.

Is It Time To Buy Gold Stocks?

The argument continues to grow stronger in favor of a market correction. Further issues stemming from the COVID-19 outbreak are likely to impact earnings in the near-term. And while stocks chug higher, larger banks and top analysts point to numerous hurdles ahead.

[Read More] Cash Is Trash; Dalio Weighs In On Gold Stocks

Gold prices remain in high-gear during the end of the record-setting week. Prices surpassed $1,626 just before the lunch hour on February 20. The last time the price of gold was at this price was back in February of 2013. Based on historic charts, the next record level would need to be north of $1,695 to break above 2013’s high.

gold stocks gold futures february highs
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Whether or not that will happen is yet to be seen. However, gold has managed to post new highs for the last 5 consecutive sessions. Does this mean that it’s time to buy gold stocks?


Midam Ventures, LLC | (305) 928-8939 | 1501 Venera Ave, Coral Gables, FL 33146 | news@goldstocks.com
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