Are These Gold Stocks On Your List Right Now?
I’ve been a little thrown off by the price of gold as of late and shocked on the price of gold stocks. I understand that when the market crashes, gold stocks will pull back. But if gold keeps climbing this is the perfect time to start stalking your favorite gold stocks.
Gold is a safe haven during a world crisis. This is the biggest world event we have ever gone through. We have the world shut down. This includes supply chains and we don’t know for how long this is going to last either. At least a year for a vaccine and months for a treatment.
If you go shop for the price of gold online, you will not be able to find it at the market price. The same is true for silver. Do I have your attention yet? So, you cannot buy gold at the market price. Why would that be? In my opinion, it’s because people are stocking up. So, when will the FOMO hit the actual price of gold?
We need to talk about the potential shortage that may be coming up here. In the news as of late, we are seeing companies having to shut down mines due to the coronavirus. This could pop the price of gold as well. We have demand that is not going to be met because of a lack of mining of the precious metal.
A Bullish Divergence For Gold Stocks?
So as investors when we see gold stocks falling and gold prices zooming, that is called bullish divergence. Now, you will have to investigate which gold stocks that can withstand its mines being shut down. So, let’s look at some of these gold stocks to watch right now.
Barrick Gold Corp (GOLD) has been holding its 50-day moving average at $18.99. I’ll be watching for this to hold as support and looking for a push to February highs of $23.00. The company came out with news on April 3 saying that they are still sticking to the 10-year production plan on bringing around 5 million ounces of gold per annum over the next decade.
Gold Fields Limited (GFI) has been holding its trade line on the daily chart at $5.10. I’ll be looking for this to become support on any pullback and will watch for a push to test its 50 and 200-day moving averages. These currently sit at $5.72 and $6.00. After this, we could be looking at February highs up near $8. GFI last released its Annual Report on February 12th. Among other things, it showed that gold produced during the quarter totaled 590,000 ounces. This is compared with 509,000 ounces a year ago.
Eldorado Gold (EGO) has been holding its trade line on the daily chart like the others and has its 50- and 200-day moving averages in the way. These sit at $7.45 and $7.71. Like the GFI chart, if it can get up and over these areas, it could be looking at February highs at $11.00. Now, on March 30th, Eldorado announced a partial drawdown of its credit facility.
The company reported it drew 150 million under its revolving credit facility due to the coronavirus. George Burns, President, and CEO said, “Although we have no immediate need for the funds, drawing on our credit facility is financially prudent at this time. We would like to acknowledge our lenders and all external stakeholders for continuing to support us, our workforce and the local communities relevant to our business.”
What’s Next For Gold Stocks?
With so much uncertainty going on in the world, I expect gold to step up and start moving. Remember, the precious metal has already broken above $1,700 1 time this year. Further unease continues to grow about the coronavirus and we are still a ways away from any vaccine. As investors, we have look at all possible scenarios.
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History tends to repeat itself and we have seen in every world crisis gold becomes a safe haven. The longer that the world is shut down and the more money the governments keep on printing, the more attractive gold is looking to everyone. Remember to do DD and make sure the gold stocks you are investing in can withstand any delays caused by the coronavirus.
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