Are Gold Stocks On Your Watch List This Week?
It’s been a few weeks since we talked about gold in shiny light. The precious metal’s price had a rough time moving above $1,750 as stocks took a driver’s seat with traders. Optimism has been a big factor that has given rise to bullish sentiment pushing markets recently.
It would seem that the economic recovery “hopes” carried a larger purpose than the underpinnings of a recession and possible second wave of coronavirus. Needless to say, with stocks dropping on Friday, gold prices not only recovered, but they also broke above $1,760 (slightly) for the first time since June 1st.
There’s been some obvious confusion over what’s really going on in the stock market today. We’ve got “Average Joe traders” outperforming hedge funds by apparently buying the dip in stocks. But the stocks they’re actually buying include the likes of Hertz, J.C. Penney, and even Pier 1 before it closed shop. We’re not talking blue-chip investors making sound investment decisions.
These are cowboys flipping stock at high rates. Thanks to this, some analysts have taken the time to get a full view of the market. They’ve assessed the overall risks that are potentially ahead and are taking into account the QE that the Fed has and is implementing.
Goldman Boosts Forecast For Gold Prices; Good For Gold Stocks?
Friday, Goldman Sachs (GS Stock Report) updated its forecast for gold prices. For the 3, 6, and 12-month outlook, the bank expects $1,800, $1,900 and $2,000 respectively. That’s up considerably from the previous forecast of $1,600, $1,650 and $1,800.
HSBC (HSBC Stock Report) echoed a similar sentiment as well. The bank sees gold prices dipping in the near-term but an overriding economic theme that provides support for gold prices. HSBC suggested that a rise in unemployment and historic fiscal stimulus measures could signal a broader move for gold.
HSBC Chief Precious Metals Analyst James Steele said to CNBC, “The two most populous nations in Asia are also the world’s two largest gold importers and consumers. Further escalation in risks could prompt greater gold purchases. Gold may dip near term, but $1,700/oz should hold. It looks to us that there is sufficient risk to support gold as the year unfolds. We also look for silver to trek higher, aided by gold.”
Gold Stocks Head Higher At The End Of The Week
If there’s one thing that has remained consistent is that gold stocks have moved in step with gold prices for the most part. This is likely why we haven’t seen many breakout gold stocks to watch recently. The Dollar’s strength has put a relative cap on gold until recently. In light of this, it could be time to start dusting off your list of gold stocks to watch right now.
Barrick Gold Stock
Shares of Barrick Gold (GOLD Stock Report) broke a 3-day downtrend on Friday. Since Tuesday the Barrick gold stock price has steadily declined. While it was a slight drop, it was a pullback all the same. Moreover, the stock has witnessed a broader downtrend if you look at trading conditions dating back to May 20. At the time, Barrick gold stock was trading around $28. Analysts at Deutsche Bank lifted their price target on Barrick earlier this week. Previously, the firm set a target of $34 with a “Buy” rating. This week Deutsche Bank upped that to $35.
Kinross Gold Stock
Another one of the gold stocks to watch on Friday was Kinross Gold (KGC Stock Report). Similar to Barrick, Kinross gold stock has been in a broader downtrend since late-May. KGC traded as high as $7.67 and has fallen as low as $5.88 since then. However, since the start of the month, the Kinross gold stock price has traded relatively sideways.
The trading channel has been between $.588 and $6.72 with the 50 Day Moving Average acting as a resistance level right now. Analysts are also getting bullish on Kinross gold stock right now. Earlier this week, RBC Capital upgraded the gold stock from Sector Perform to Outperform. It also raised its price target. Prior to this week, RBC had a target of $7. It now upped that to $7.50.
Gold Fields Ltd.
Gold Fields LTD (GFI Stock Report) was one of the biggest movers among high-volume gold stocks on Friday. GFI stock jumped to a high of $8.35 after retesting its 50Day Moving Average as support on Thursday. Unlike Kinross and Barrick gold stock, Gold Fields hasn’t really dropped as much since late-May. It also hasn’t crossed below the 50DMA since the big market sell-off in March. There weren’t any new analyst ratings or upgrades to speak of this week.
Yamana Gold Stock
Similar to Gold Fields stock, Yamana Gold (AUY Stock Report) has also performed relatively well in comparison to its larger cohorts. In late-May, Yamana gold stock reached a high of $5.65. Since then, it’s pulled back to lows of $4.66 using its 50 Day Moving Average as a level of potential support. Furthermore, and like GFI, Yamana hasn’t crossed below this level since the March sell-off that the entire market saw. This month was one of expansion for Yamana.
Monarch Gold Corp.(MRQRF Stock Report) closed a $5,419,800 private placement with Yamana, Alamos Gold Inc. (AGI Stock Report) and other investors. Yamana will be entitled to participate in future financings to maintain its interest in the Corporation. It will also be represented on the Board of Directors of Monarch.
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