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Are These Gold Stocks On Your List Right Now?

Gold futures slid back toward the 200 day moving average support as markets digested the latest round of COVID-19 news. Given the fact that there are still more cases and counting, in the US, the state of concern is heightened right now. Regardless of gold prices, however, there were several gold stocks outperforming the majority of the sector on Friday.

[Learn More] How To Invest In Gold

This may not seem like a big deal but consider the fact that larger gold stocks like Barrick gold stock (GOLD) and Yamana Gold stock (AUY) are down this week, it’s important to keep an eye out for stocks that are withstanding the pressure. Keep in mind that even if today’s spike in the market was seen as beneficial, we’re still much lower than previous highs. The main culprit: a flight to stockpile cash.

“We suspect that margin calls and losses in other markets are driving investors to search for cash, and gold happens to be the liquid position they are choosing to cash out on,” said RBC Capital Markets commodity strategist Christopher Louney. But with this, many suspect that the state of global financials could push momentum back into safe-haven gold stocks regardless of the coronavirus.

When it comes to gold, the price was unable to avoid the market sell-off. Thursday saw the acceleration of this while stocks posted the worst drop since the 80’s. As Louney explained, margin calls, as well as stop-losses triggering helped add fuel to the dumpster fire. This essentially forced investors to sell positions to get “cashed up”. What’s next? As some reports cite, President Trump may declare a state of emergency to unlock another layer of protection against any fall-out that may result.

Gold Stocks To Watch

While people continue to stock up on toilet paper, others are searching for new opportunities with safe-haven gold stocks after the dip. IMC International Mining (IMIMF) (IMCX), for instance, has stayed the course. Shares of the gold discovery company maintained its sideways trend this week.

What’s also important to note is that the company’s stock tested previous 52-week highs of $0.50 CAD on Thursday. All this, while other gold stocks like Kinross Gold (KGC) dropped the new 2020 lows. What’s transpired that could suggest optimism around the company itself? A potential acquisition.

Last month IMC announced plans and signing of a letter of intent to acquire Thane Minerals. This purchase would include Thane’s 100% owned Cathedral Property in British Columbia, Canada. The Cathedral Project is in an area called the “Quesnel Terrane” which is rich in mineralization perfect for gold discovery. In fact, just North West of this region is an area called “The Golden Triangle,” which hosts some of the richest gold ore bodies in the world.

Gold Stocks Trying To Hold Support

Meanwhile you have other gold stocks like Hecla Mining (HL) trying to hold a level of support above $1.50. Shares slid once again on Thursday with the rest of the sector. It wasn’t that long ago when Hecla traded north of $3 but aftermarket trading on March 12 saw shares reach lows of $1.51. Despite this being the case, Hecla has been in favor of analysts recently. Both B.Riley and RBC raised price targets on the company within the last 45 days.

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On top of this, Hecla is also coming off a Q4 sales beat after reporting the latest earnings results. For the fourth quarter, the company reported sales of more than $224 million. Wall Street estimates pegged the company doing sales of $181.86 million. While Hecla missed on EPS, it was able to realize increased production for silver along with increased reserves for lead and zinc.

“In 2020, at current prices, we expect continued strong cash flow generation with the ongoing solid performance at Greens Creek, the ramp-up of Lucky Friday, expected improvements at Casa Berardi and the potential mine life extension at San Sebastian from the Hugh Zone,” said Phillips S. Baker, Jr., President, and CEO.

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