Gold Stocks In Focus Amid Key Economic Data Reads
While U.S. markets are closed, one of the few ways to make money in the stock market today is through gold futures. Trading electronically, the futures market has seen gold prices jump to a high of $1,736.90 on Memorial Day. During the early morning session, gold prices plummeted to lows of $1,718 in a sharp drop around 9:40AM EST.
But the recovery was just as swift. Heading into the lunch hour, prices are now back above $1,725. This week could be an important one for gold and gold stocks. Key economic data readouts are scheduled almost every day this week.
One of the most telling will come Wednesday. This is when the Fed’s beige book is due. This is effectively a summary of economic activity over the past month. We’re also going to get April manufacturing data when durable goods are released on Thursday. April personal income and spending figures are due on Friday. However, most of the focus this week will be on consumer confidence figures. These are due out during the first half of the week. This is followed by Michigan consumer confidence on Friday.
Any sway to the pessimistic side of sentiment could fuel gold. The economy has been tiptoeing on shaky ground this year. COVID-19 has certainly put a huge dent in global economic growth. China recently nixed its annual growth projection for the first time in decades. Furthermore, U.S. gross domestic product declined in the first quarter, dragged down by the pandemic’s grip in March.
Gold Stocks To Watch: New Gold
Shares of New Gold stock (NGD Stock Report) were among the few finishing the week in the green last week. The company is an intermediate gold mining company with operations across the globe. New Gold has a portfolio of four producing assets: the New Afton Mine in Canada, the Mesquite Mine in the United States, and the Cerro San Pedro Mine in Mexico. In addition, New Gold owns 100% of the Rainy River and Blackwater projects in Canada, along with a minority stake in the gold stream on the El Morro project in Chile.
Last week, NGD stock continued its multi-week uptrend. The latest news helped spark a move to new 2020 highs. Back in January, the gold stock reached a high of $1.07 but never managed to retest that until recently. Now that the gold stock has recovered and entered a new bull market, we look to 2019 levels for potential resistance and support.
Last August and September saw initial support around $1.15. So it’s no coincidence to me that NGD stock has settled at these levels but hasn’t broken much higher. In its last earnings report, the company cited that it has a strong liquidity position of $600 million.
Gold Stocks To Watch: Hecla Mining
Hecla Mining (HL Stock Report) was another one of the gold stocks to close the week on a high note. While HL stock made new 2020 highs, it also etched a new 52-week high on Friday. Shares reached $3.57 during the morning session, range not traded in since July of 2018. On Thursday the company held a virtual Annual Meeting of Shareholders.
The company presented its response to COVID-19. It also discussed key investment considerations and its outlook on silver and gold markets. Something that was unique is that Hecla allowed investors the chance to book a call with members of senior management for information on one of four topics. These included operations, finance, ESG, and a call with CEO Phillips S. Baker, Jr.
One of the reasons that could have fueled HL stocks run aside from the meeting was the silver market. While gold prices have been relatively sideways, silver has been climbing considerably swiftly. From May 1st through last week, the price of silver jumped by 20%. In comparison, the price of gold has remained relatively flat. Hecla’s exposure to silver may have also helped to boost momentum in May. Will that continue through next month?
Gold Stocks To Watch: Golden Star Resources
Gold Star Resources (GSS Stock Report) inched out a new May high on Friday. Shares of GSS stock broke above $3 for the first time since early March. While this is a noticable milestone for the stock, it’s also important to note that this high was right around the 200 Day moving average of $2.94. For the most part, GSS stock has had a hard time breaking above its 50-day and 200-day moving averages ever since last summer. There’ve been short term jumps above these levels but overall, nothing has become lasting so far.
Could this time be different? For most of May, GSS stock has been in a steep uptrend moving from $2.39 on the 1st to highs of $3.01 on May 22. In a recent corporate update, Golden Star reported new progress is its “fight” against the impact of COVID-19.
“Consistent with the Company’s COVID-19 management protocols and those of the Ghana Health Service, contact tracing has been carried out and as a result close to 60 members of our Prestea team are currently in quarantine and awaiting test results. Of these, the majority are involved in mining activities (including rock breaking, scoop operations and blasting) and engineering activities (including winder operations and pumping). As a result, site management is revising planned operations in the short-term in order to ensure the safety of all team members and to allow for possible critical skill shortages,” said Golden Star in its press release.
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