New Trends In Gold Mining Stocks Point To Yes
When was the gold rush? If you’re an investor in gold stocks or just a history buff, the big gold rush happened in the mid-19th Century. This was between January of 1848 to 1855. While it saw hundreds of would-be miners try their hands at gold mining, it also produced some of the top gold mining companies in history. Fast-forward to 2020 and we could be seeing a gold rush of a different kind. Looking back at the last year for the precious metal, you’ll see a strong rise, brief drop, and even stronger recovery.
In fact, since May of 2019 the price of gold has risen as much as 39.6% year-to-date. For such a commodity, that’s somewhat unheard of within such a short timeframe. Consider this: from December of 2016 to April of 2018 the price of gold managed to move up roughly 20%. That was over the course of 16 months. Here’s something else that’s a bit crazy about the price of gold recently.
Since March 16th lows of $1,450.90, to recent highs in 2020 of $1,788.80, gold prices jumped 23% in a matter of fewer than 30 days. So when you talk about the excitement in gold stocks, there are definitely periods that matter. Not to discount what happened between 2016 and 2018. But over the last year and even the last few months, the bullish case for gold has been incredibly strong.
A New Gold Rush For Gold Stocks
This brings me to the point about the new gold rush and how gold stocks are offering potential more to “chew on” than just the precious metal itself. Look at the Barrick gold stock price (GOLD Stock Report) recently. As one of the leading gold mining companies, Barrick gold has established strong footing in the market. But over the last few months, Barrick’s stock price has performed more akin to that of a penny stock than a large blue-chip mining company.
Take a look at the move fro mid-march to recent. The Barrick gold stock price has jumped as much as 125% with this year’s high of $28.50. The more interesting part is that Barrick maintains a period-to-date gain of over 105%.
The company recently declared a quarterly dividend and reported first-quarter EPS for 2020. Senior executive vice-president and chief financial officer Graham Shuttleworth said that maintaining the dividend level that was increased three times over the last year reflects Barrick’s continued strong financial performance.
Earnings per share for Barrick Gold in Q1 2020 came in at $0.16. This was in line with Wall Street estimates. However, its $2,721 billion in sales missed expectations of $2.77 billion. The company produced 1.25 million ounces of gold and 115 million pounds of copper.
Are Other Gold Stocks Performing The Same Way?
The long and short of it is that this new gold rush is here. The last time gold prices saw a rise like this, the precious metal ended up reaching all-time highs. In the stock market today, a number of analysts are growing more bullish on the topic. Citi (C Stock Report) gave a 12-24 month outlook of $2,000/ounce. That would mean record gold prices altogether.
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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.
Not only has the Barrick gold stock price jumped but a number of lower-priced gold stocks followed suit. Look at the Sandstorm gold stock price (SAND Stock Report). Shares have climbed from lows of $3.32 on March 16 to highs of $8.47 this week.
Sandstorm gold stock has jumped in advance of its upcoming earnings report. May 7th will be when the company releases its first quarter 2020 results after the market closes. There will be a conference call to follow.
In its last report, Sandstorm gold stock rallied as the company reported record 2019 results. It also revealed that it would up-list to the New York Stock Exchange. Furthermore, based on the Company’s existing royalties, attributable gold equivalent ounces sold for 2020 is forecast to be between 60,000 and 70,000 ounces. The Company is forecasting attributable gold equivalent production of 125,000 ounces in 2024.
Shares of Gold Fields stock (GFI Stock Report) followed a similar path in March. Gold Fields’ stock price dropped to lows of $3.79. This was a level that the gold stock hadn’t seen since May of 2019. But just like Barrick and Sandstorm, Gold Fields stock price quickly recovered. In fact, as of just a few weeks ago, GFI reached a new 7-year high of $8.48.
When you think of how quickly Gold Fields stock price ran 123% fro mMarch to late-April, it really puts into perspective the recent increase in the bullishness surrounding gold stocks right now.
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