The Latest Oil Report Doesn’t Stand In The Way Of Gold Stocks
The price of gold and many gold stocks pushed higher on Wednesday. Ahead of this week’s proposed OPEC meeting, oil prices traded relatively flat. Despite the volatility around the latest build numbers, oil maintained a trading channel between $23-$25. But this didn’t stop gold prices from inching higher, back toward $1,700 an ounce. Companies are now taking the offensive when it comes to the global COVID-19 pandemic.
This week, Barrick Gold (GOLD) announced that it’s launching a $1.5 million support program for helping relief efforts in the Democratic Republic of Congo. This is where the company operates its Kibali gold mine. The company believes that the current situation requires a national response from all who have the DRC’s interests at heart.
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In light of this, we could see other companies follow suit. While this hasn’t yet become the case, it could be the early signs of an offense instead of a defense to the cause in shutting down mines. And while companies like Barrick establish goodwill in the areas surrounding their mines, the price of gold is back on the rise. The big question, can it solidify itself above $1,600 for good? According to TD Securities, gold could be “set-up for a multi-year bull market.”
“Gold is looking to solidify north of $1,600/oz as the Fed’s massive QE [quantitative-easing] program has historically been associated with a suppression of real rates. It is still too early to say if we have entered the recovery phase just yet, with the risk of another containment-induced deflationary shock still elevated, but recent price action has done well to firm upside momentum signals.”
But could this be the signal investors have been looking for? That’s another uncertainty right now. The main reasoning behind it is the state of the stock market today.
Gold Stocks To Watch: Yamana Gold
Yamana gold stock (AUY) once again tested the 200 Day Moving Average on Wednesday. While it traded slightly higher than its previous close, the gold stock managed to break a new high for April t $3.50. If you were watching Yamana gold stock on April 7, it reached a high of $3.47. Needless to say, this marked the 5th day in a row that shares traded at higher highs and higher lows.
Also, this week, Yamana reported preliminary first-quarter 2020 results. These included 192,238 ounces of gold and 2.73 million ounces of silver produced. The total gold equivalent ounce production during the quarter reached 221,746 GEO. Similar to Barrick, Yamana has also followed through with goodwill efforts for its mining communities.
“Yamana commends the remarkable dedication, commitment, professionalism, and compassion of its employees who have come together in these challenging times to drive the outperformance in the first quarter while also supporting the Company’s efforts to provide vital supplies to local communities. This is the Yamana way and we could not be more proud.”
Gold Stocks To Watch: Harmony Gold
Shares of Harmony Gold (HMY) made an attempt to reach new highs for the month on Wednesday. But as of the mid-morning session, Harmony gold stock had only managed to reach highs of $2.53; 2 cents shy of April highs.
While the company hasn’t put out any new updates, the junior mining stock has remained steadfast in not ebbing with the gold price trend. For the last three days, HMY stock has traded tightly between $2.25 and $2.50; breaking slightly higher and lower at times.
In its last update, Harmony reported that it ceased operations in South Africa. However, it wasn’t because anyone was infected with coronavirus. The South African government has placed a 21-day lockdown on the country.
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This will run through next week on April 17th. In light of these developments, the company released production guidance or the period. Harmony expects to “only” produce between 650 kilograms to 700 kilograms of gold in South Africa during the 21-day period, according to a statement.
Gold Stocks To Watch: Coeur Mining Inc.
Coeur Mining Inc. (CDE) received an upgrade on Wednesday. Roch Capital boosted its rating to a Buy. However, it also lowered its price target. Previously, the firm carried a target of $5.50, it just cut that figure. This week Roth restated its target at $5 amid the latest bout of uncertainty in the market.
On April 7 the company announced that it would be withdrawing its full-year guidance in light of the latest round of suspended activity. Earlier this year the company temporarily suspended mining and processing activities in Mexico at its Palmarejo complex. The decree, issued by the Federal government of Mexico, restricts all non-essential business activities through April 30, 2020.
The Mexican government provided additional guidance on the decree on April 6, 2020, clarifying that mining does not qualify as an essential business activity.
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