Gold stocks weathered the storm on Wednesday as broader markets tried to recoup some gains. While the S&P and NASDAQ gapped up in the morning, gold prices dipped. But by the end of the day on June 17, most gold stocks & the price of gold bounced back to a relatively even level compared to Tuesday.
This comes as investors weigh economic optimism against increasing COVID-19 data. Furthermore, China is bringing more concerns after parts of Beijing had to be locked down again. “Traders and investors are weighing the bullish aspects of generally faster rebounds in world economies than many had expected versus the bearish element of a resurgence in Covid-19 reported cases in some regions of the globe, including some U.S. states,” said Jim Wyckoff, senior analyst at Kitco.
A clash between Indian and Chinese soldiers in their border region this week, during which India said 20 of its soldiers died, marks the first military conflict between the two nations in decades and that, along with the North and South Korea tensions “bear watching,” said Wyckoff.
A skirmish between Indian and Chinese soldiers in their border region this week has also caused uncertainty. India said 20 of its soldiers died and marks the first military conflict between the two nations in decades. You’ve also got increasing North & South Korea tensions that will have investors looking for bearish bets; or flight to safer-havens.
Will Gold Stocks Breakout Again?
COVID-19 has done a number on the stock market. Massive quantitative easing measures have likely preserved things for now but what about in the future? This being an election year may already see volatility increase especially around the time of the election itself. If you look at most gold stocks right now, you’ll see a closer reliance on the price versus on company headlines.
Here’s a prime example from today. Generally speaking, during times that gold prices are on the rise, an analyst upgrade typically compounds a move. Barrick Gold (GOLD Stock Report) for instance received a new, higher price target. Deutsche Bank lifted its target to $35 from $34. However, the market wasn’t overly enthused as gold prices weren’t making any type of momentous moves on Wednesday.
One of the main culprits muting gold’s rally was the dollar. The U.S. dollar index, which tracks the greenback’s strength against a basket of foreign currencies. It was up 0.2% Wednesday as gold futures settled, as gauged by the ICE U.S. Dollar Index DXY, 0.15%. Bond yields were also rising a bit. The 10-year Treasury note yield was at 0.75% after closing last week at 0.698%.
Gold Stocks Eek Out Slim Gains On Wednessday
Despite major gold stocks like Barrick, there were others that squeezed out some gains on Wednesday. B2Gold Corp. (BTG Stock Report) finished the session up 3%. This wasn’t much to write home about but a green day is a green day. The company recently declared a cash dividend for the second quarter of 2020 of $0.02 per share, payable on July 7, 2020 to shareholders of record as of June 23, 2020. B2Gold said that it expects to declare future quarterly dividends at the same level which will increase its annual dividend from $0.04 per share to $0.08 per share.
International Tower Hill Mines (THM Stock Report) also finished out the session with a green close. THM stock reached highs of $1.25 on Wednesday. For the last few weeks the gold stock has been stuck in a sideways trend. If you remember earlier this year at the end of May, International Tower Hill turned a few heads. The company announced that a work plan to prepare a pre-feasibility study was approved by the Board. This was for its Livengood project in Alaska. Furthermore, its shareholders also approved several things at the company’s Annual Meeting. These included corporate directors and executive compensation measures.
This month the company appointed Christopher Papagianis to the Company’s board of directors. According to the company Mr. Papagianis last served in government as Special Assistant for Domestic and Economic Policy to President George W. Bush. International Tower said that in this role, he guided the collaborative process within the White House to develop and implement policies, legislation, and regulations across numerous agencies.
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