Gold Stocks Jump As Market Braces For Trump Comments
Gold stocks are back in their upward trend on Friday. This comes as the market attempts to digest the latest headlines from China/U.S. trade talks; or lack thereof. U.S. President Donald Trump is expected to hold a news conference on China later today. His administration has aimed to pressure the country over its treatment of Hong Kong.
“People will be looking for guidance to see whether that could trigger further escalation between the two largest economies. After Trump’s speech, people will also be keen to see China’s response,” said Bank of China International analyst Xiao Fu. Even with many economies reopening, the economic status is still quite weak. So with this new geopolitical tension it means that recovery in many parts of the world can take longer, which could lift gold prices.”
Silver & Gold Prices Fuel Mining Stocks
The economies’ reopening has been a vote of confidence for the stock market. While we’re likely pretty far off from getting back to “fully functional,” even the glimmer of turning things back on has hopes high right now. That’s probably one of the reasons why the stock market is outpacing the economy right now.
Regardless, the underlying financial concerns haven’t gone anywhere and headlines are focusing back on China trade. In light of this, we’re seeing the safe-haven trade build momentum again. If you look at the SPDR Gold Trust (GLD), after slumping earlier in the week, GLD is back above $163 once again.
Another thing to take note of is that gold prices are the only metal on the move. As discussed earlier this week, the silver trade has started to shine a bit brighter. The iShares Silver Trust (SLV) just made a new high for the last few months. Since hitting new 52-week lows of $10.86, SLV has rebounded by over 50% as of this week. While the gold trade has treaded water, stocks with some exposure to silver have either held their trends or moved higher during the same period.
“Silver investment demand has been strong, but industrial demand has capped upside to prices; stronger offtake from manufacturers should help the white metal,” Bank of America analysts wrote in a note.
Best Gold Mining Stocks: Yamana Gold
Shares of Yamana Gold (AUY Stock Report) continued the 3-day uptrend that began earlier this week. Last week AUY reached new 52-week highs of $5.65. However, the trouble that gold prices have run into pulled down the gold stock. The rebirth of interest that has come back to gold prices have refueled some movement at the end of the week.
If you look at the AUY stock chart, the 1 year period gives a much larger view of key levels. The level around $2.25 continued to hold as a major level of support. If you look at the 6-week trend, we can get a better understanding as to how AUY stock might have bounced. The $4.90 level has been a consistent area of resistance and apparently, now support with the last bounce we’ve seen from Yamana gold stock.
This week the company announced it has completed the previously reported sale to Nomad Royalty Company Ltd. of a portfolio of royalty interests and the contingent payment to be received upon declaration of commercial production. This is at the Deep Carbonates Project at the Gualcamayo gold mine for a total consideration of $65 million.
Best Gold Mining Stocks: Barrick Gold
On the flip side, Barrick Gold (GOLD Stock Report) has responded more to major technical levels. Take a look at the 200- and 50-Day Moving averages. Both have acted as key levels of support and resistance. When GOLD stock dipped in March, the 200-Day moving average was acting as resistance and then turned to support. After that, the 50-day was the new resistance.
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In early April, it then came support and has acted as that ever since. Even as recently as this week, GOLD tested its 50DMA, which held as support and now we see the stock bouncing back. The continuing argument is related to the “chicken and the egg” conversation. Did gold bounce because of technical levels or are technical levels coincidentally in the right place because gold bounced?
In either case, it has worked out well for Barrick Gold stock this month. On top of this, the rebound in gold prices has also become a leading catalyst. Earlier this month, Barrick settled the majority of the North Mara legacy land claims. It paid the first tranche of the $300 million settlement it agreed with the Tanzanian government to resolve the disputes it inherited from Acacia Mining.
Best Gold Mining Stocks: Coeur Mining
Coeur Mining (CDE Stock Report) has been less technically fueled than the other two. However, it doesn’t mean we shouldn’t still pay attention to where levels of support and resistance could have formed on the chart. Shares of CDE stock managed to bounce around 19% over the last 3 sessions. The CDE stock chart shows shares essentially bounced off of the 200-Day moving average. In this case, we can see a major technical level acting as support. However, earlier this year, CDE’s stock chart was trading based on price technicals similar to Yamana gold stock. Let’s take a look:
For the most part, CDE stock has seen the $5 area act as a clear level of support and resistance over the last 52-weeks. While interim drops might have seen the 50DMA act as support, $5 has been the “make or break” area many more times in comparison. This week we clearly saw that once again.
The mining stock hit a low of $4.95 on Wednesday and in-kind with gold prices, CDE stock once again found itself bouncing from the $5 area and to where it is in the stock market today. With the movements we’re seeing in silver and gold prices, fueled by geopolitical headlines, will CDE remain one of the best gold mining stocks to watch in June?
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