A number of analysts remain bullish on gold stocks and gold. But the same lot is still living in reality with many suggesting it may be due for a cooldown. On Monday, we may have seen the price of gold, and, as a result, gold stocks take a breather. The good news? Gold prices and the technical trend remain intact. Over the last few months, gold prices have used the 50-day moving average as a level of support.
Despite the pullback, most gold stocks and gold itself saw in March, the price of gold as ticked along the 50DMA for the better part of the last 12 months. Now sitting above $1,660, the latest contraction in the gold sector gives investors some time to catch their breath as gold holds around its relative level of support between $1,675-$1700. Ever since retreating from 2020 highs, it would seem that the price of gold found its sweet spot within that range.
Are We Near Technical Levels For Gold Prices?
Needless to say, that doesn’t mark the end for gold bulls. The long and short of it is that nothing goes up in a straight line and the whole reason for investing is to make money. Of course, we would see periods of profit-taking considering the monster moves that gold stocks and precious metals made this year.
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“Bulls’ next upside price objective is to produce a close in June futures above solid resistance at the April high of $1,788.80,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a Monday research note.
“Technically, the gold bulls have the overall near-term technical advantage amid an uptrend on the daily bar chart. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,666.20.”
Were There Any Gold Stocks To Watch This Week?
You would think that after such a pullback, top gold stocks would be hard to come by. But there were actually several names that were the best gold stocks to watch on Monday. In fact, there were two gold stocks that saw both increased volume and price movement among almost all of the other gold stocks in the sector.
At the end of April Tanzanian Gold (TRX Stock Report) announced that SGS Canada Lakefield would soon be starting comprehensive metallurgical testing on the primary or “sulphide” gold mineralization. This is in order to finalize a flow-sheet for the design of a large gold processing plant that will be the basis for the Final Feasibility Study of the Buckreef Project.
PricewaterhouseCoopers Corporate Finance Inc. was recently brought on to assist in securing project financing for the construction of two gold mining projects at Buckreef. In the last 10 years, PwCCF provided financial advice on over 4,000 transactions globally and in 2019, was ranked first by deal count by Mergermarket with over 569 deals completed. So they came with a solid track record to say the least.
James Sinclair, Executive Chairman of Tanzanian Gold Corporation, said “We have engaged a very talented international finance team with a world recognized ability to help us bring our two gold mining projects at Buckreef into production. The PwCCF team has worked for several months conducting extensive due diligence and we look forward to working with them during this exciting period”.
Shares of TRX stock continued higher on May 11 as the gold stock traded its highest share volume all year at over 2.6 million shares and a rise of over 40% for the month.
Great Panther Mining Ltd.
Another top performer among gold mining stocks so far this week was Great Panther Mining (GPL Stock Report). Late last week the company reported consolidated financial results for the first quarter of 2020. These reflected the operations of its three wholly-owned mines: the Tucano Gold Mine in Brazil, and the Topia Mine and Guanajuato Mine Complex in Mexico.
Results were strong and included revenue of $48.1 million. That represented a 188% growth over Q1 2019. It also saw production of 34,725 gold equivalent ounces and cash flow from operating activities of $11.8 million.
“We delivered significant growth in revenue, mine operating earnings and operating cash flow in the first quarter of 2020 as a result of the acquisition of Tucano last year.”
“The team achieved a significant advance in stripping at Tucano completing a 36% increase in waste movement over the prior quarter which is strongly supportive of our guidance for 2020 and positions us well for 2021,” stated Rob Henderson , President and CEO. Shares of GPL stock haven’t performed as well as TRX in May. However, there has been an admirable last 2 days of bullish trading for Great Panther. Can that continue through the month?
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