Gold Stocks Are Moving Higher; Are These on Your List?
The price of gold has been on the radar of investors for months now. As many gold stocks continue to recover from the pullback in March, others are hitting new highs. From a broad view, one might think that gold has stagnated. That’s based on the price of gold trading in a tight channel over the last few weeks. Needless to say, gold futures remain above $1,700 for the time being. Some analysts expect this to drastically change by this time next year:
“This year will be another one of double-digit percentage growth for gold. It could hit new all-time highs and top $2,000 — if not this year then sometime soon on the horizon.”David Beahm, president and CEO of Blanchard & Company
Other big banks also agree with this same sentiment. Reports from Citi this year 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.
Bullish Bets By Big Banks On Gold
Citi (C Stock Report) gave a 12-24 month outlook of $2,000/ounce. That would mean record gold prices altogether. Paul Schatz, the president of Heritage Capital stated that “I think gold’s going to $2,500, $3,000 an ounce in the 2020s because the climate—the landscape for gold is so hugely supportive.” While Schatz may be overly optimistic, there’s no doubt that analysts believe gold and mining stocks may have some high price targets moving forward.
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But Bank Of America (BAC Stock Report) had something a bit different to say. BofA Global Research boosted its 18-month price target for gold to $3,000 an ounce from $2,000. This is more than 50% above a nine-year-old record at around $1,921. The main reason behind the aggressively bullish stance on gold had to do with the prospects of endless monetary expansion from central banks. This includes the Federal Reserve’s initiatives to limit the economic damage from the COVID-19 pandemic.
The Fed Can’t Print Gold-Bank of America
BofA expects bullion to average $1,695 an ounce this year and $2,063 in 2021. “But beyond traditional gold supply and demand fundamentals, financial repression is back on an extraordinary scale,” the BofA report said.
Gold Stock To Watch
This has opened up the floodgates for gold stock speculation. While you won’t find as many headlines as some of the hyped-up tech stocks, gold stocks have moved strongly. In March, there was a big opportunity to buy gold stocks as the entire market pulled back. Some of the top gold stocks even ended up dropping below their 2019 highs. But since then, the bulls have been in control. This week saw several gold stocks reach or come close to reaching new 52-week highs.
Newmont Gold Stock
WIth earnings season heating up, the momentum could be poised to continue. Newmont gold stock (NEM Stock Report) issued its Q1 earnings on Tuesday. Net income attributable to shareholders rose to $822 million or $1.02 per share in the first-quarter ended March 31. This compared with $87 million, or 16 cents per share, in the year-ago period, the U.S.-based company said.
The jump in profit was due to the gains on the sale of KCGM, Continental Gold and Red Lake and higher production from the acquired Goldcorp assets and higher average realized gold prices, Newmont said. This saw the gold stock reach new 52-week highs of $65.06.
Yamana Gold Stock
Yamana gold stock (AUY Stock Report) also reached new 52-week highs on Tuesday. Shares have been chugging along for the last few weeks and finally hit $5. This was the first time since August of 2016 that Yamana gold stock traded at this level. Last week Yamana provided financial and operational results for the first quarter of 2020. Net earnings of $45.0 million or $0.05 per share basic and diluted compared to a net loss of $4.1 million or nil per share basic and diluted a year earlier.
Gold production of 192,238 ounces was in line with plan, highlighted by exceptional performances from Jacobina, El Peñón, and Minera Florida, which all exceeded their production targets, and despite government-mandated temporary suspensions of operations at Cerro Moro and Canadian Malartic.
Franco-Nevad Gold Stock
Franco Nevada gold stock (FNV Stock Report) reached an even higher high after the market closed on Tuesday. Following a new 52-week high of $146.81, the gold company continued higher to $148 during after-hours trading on May 5.
Recently, stock jock Jim Cramer gave praise to FNV and Barrick gold stock in a recent episode of his Mad Money Lightning Round. Franco Nevada Corp has been really good and Cramer sees it as a winner. He would buy more on a pullback. He likes Barrick Gold Corp (GOLD Stock Report) even more. This week the company will host its earnings along with a conference call on May 6th.
Other top gold stocks to reach new highs this week included Wheaton Precious Metals (WPM Stock Report). Shares of the company reached a high of $42.79 and marked a jump of 129% since the March pullback.
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