Coronavirus Concerns Are Fueling Gold’s Massive Bull Market
Gold prices have been on a roll for much of the past few days. After a minor correction, it roared back to edge higher today. The stock markets seem to be on the verge of a correction as fears over the coronavirus escalating in cases.
The current unknown is how much of a correction the market will make. On Wednesday, many thought the S&P could begin bouncing back stronger after a near 2,000 point rout. But for the most part, shares traded flat compared to its previous close. Meanwhile, gold stocks posted a turn around after consolidation took hold on Tuesday.
February 26 saw gold prices continuing on the 2020 bull run to highs of $1,657.10. When it comes to a potential “breakout zone,” some have considered the range between $1,600 and $1,675. But with so much riding on global economic concerns, it may be more than a technical point to make right now.
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In such a situation, investors are likely to continue moving into safe-haven assets like gold. Recently, gold hit its highest level in seven years. Given the circumstances, it might be worthwhile for investors to have a look at gold stocks.
Top Gold Mining Stocks To Watch #1 Kinross Gold Corporation
The first of the gold stocks to watch is that of Kinross Gold Corporation (KGC Gold Stock Report). It has rallied by as much as 72% over the course of the past 12 months. It’s also one of the major players in the industry.
Kinross owns mines in the United States, Asia, Africa, Russia, and South America. In its fiscal 2019 results, Kinross generated net profits of as much as $423 million against revenues of $3.5 billion. Improving gold prices and better production could prove to be significant benefits for Kinross in 2020.
Kinross also discussed the future of the company. It expects production to be relatively flat on a quarter-over-quarter level through this year. However, it’s anticipating an increase in the fourth quarter. In addition, it expects sustaining costs to be around $970/ounce within 5% for 2020. That’s lower than the company reported for the full-year of 2019. This mainly resulted from lower costs of sales per ounce sold in addition to capital expenditures.
Top Gold Mining Stocks To Watch #2 SSR Mining
SSR Mining Inc. (SSRM Gold Stock Report) is another gold stock to watch. That’s considering the fact that it has gained as much as 83% since May 2019. Last Friday, the company released its fourth-quarter results and ended up boosting its adjusted net profits considerably from the year-ago period.
The net income stood at $36.6 million, which is significantly higher than the $4.4 million in net income that it had generated back in Q4 2018. However, the company missed on revenue for the period. As far as production was concerned, SSR managed to achieve guidance for the 8th consecutive year.
It delivered gold equivalent of over 420,000 ounces with a cash cost of $740 per payable gold equivalent ounce. It was also the company’s fourth consecutive year of positive earnings per share while also delivering record annual gold production at its Seabee project.
Top Gold Mining Stocks To Watch #3 Novagold Resources
Another gold stock to watch is that of Novagold Resources Inc (NG Gold Stock Report), which has jumped by as much as 187% since late-January 2019. Earlier this month, the company made another important announcement that could prove to be a significantly positive trigger. The company announced that it had received the key approvals from the State of Alaska for its Donlin Gold Project.
Greg Lang, President and CEO, said, “These final State land authorizations are important for the advancement of Donlin Gold. These achievements would not have been possible without the dedication of the professionals at the Alaska Department of Natural Resources to advance permits and approvals for the project in a transparent as well as environmentally and socially responsible manner with strong adherence to governance best practices.”
Top Gold Mining Stocks To Watch #4 Eldorado Gold
Eldorado Gold Corp (EGO Gold Stock Report) was another one of the high flying gold stocks to watch this week. It managed to touch a new 52-week high on Tuesday. Furthermore, it recorded gains of 67% since last Monday. In addition to that, CIBC upgraded Eldorado gold stock from neutral to outperform. It also set the target price at $13 a share.
The previous target price had been $9.75 a share. The company’s five-year outlook has been regarded as one of the major reasons for optimism. Eldorado explained that completed long-cycle heap leach testwork indicates additional heap leach life of mine recovery at Kisladag to ~56% and extends mine life by 15 years through 2034. On top of this, the company set its gold production guidance at 520K-550K oz. That’s a 35% year-over-year increase at the midpoint, at all in sustaining costs of $850-$950/oz. sold for 2020.
Top Gold Mining Stocks To Watch #5 Kirkland Lake
Lastly, Kirkland Lake Gold (KL Gold Stock Report) ended marginally higher on Tuesday. This came after the company announced two new appointments to its board. Kirkland announced that it appointed Ingrid Hibbard and Peter Grosskopf to its board. The appointment of such experienced candidates to the company’s board may have resulted in the optimism in the market.
However, Wednesday’s session remained relatively flat. Something to keep track of with Kirkland is its recent financial results. The company posted an increase in both earnings per share and sales from the same period in the prior year. What’s more, is that the company implemented an automatic share purchase plan to purchase up to 20,898,692 of its common shares.
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But even in light of this, analysts remain bearish on the gold stock. CIBC, BMO, TD, and Scotiabank all cut price targets. The lowest target came from Scotiabank at $56 CAD with the highest coming from CIBC at $62 CAD.
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