Are Gold Stocks On Your List Today?
The stock market today is more like a craps table than an orderly exchange. Every day we have similar headlines yet the market reacts differently. When there’s uncertainty, it tends to send smart money into safe-havens. One of these, obviously is gold and on July 7, the price of gold reached new 2020 highs. These are the highest gold prices since 2011. Now we’re beginning to see institutional strength come into play with a bullish outlook as well.
Analysts at Commerzbank said that even with speculative momentum starting to weaken, it is nowhere near overbought levels, “The current level of 138,600 contracts is not yet alarmingly high because the rise started out from a low level.”
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Other analysts reiterated a similar sentiment. “There is no doubt that traders are pouring money in gold [exchange-traded funds] for the gold demand has strengthened due to virus concerns,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a Tuesday report. “Falling interest rates around the globe, and the weaker dollar are keeping the rally alive for the gold price.”
World Gold Council Identifies Higher Demand
The World Gold Council recently said that there’s evidence of the unprecedented investment demand for gold-backed ETFs.
In a report published Tuesday, the Council said that gold ETFs saw the seventh straight month of inflows in June. Gold holdings rose by 104 tons last month. The inflows have pushed gold holdings to new all-time highs of 3,621 tons. The Council also added that assets under management have jumped to their highest level on record.
“The economic and geopolitical environment remains support for gold investment, with most of the existing gold demand drivers still relevant. The opportunity costs of holding gold remains low, as continued central bank activity keeps interest rates low or negative,” analysts at the Council said.
“And there are serious concerns that the trajectory of the COVID-19 pandemic threatens any nascent economic recovery. Growing infection rates across some parts of the world, particularly in the U.S., suggest that there is some way to go before economies can reopen with confidence.”
Top Gold Stocks To Trade [or Ignore] Right Now
So this begs the question: Is it time to search for gold stocks to trade? While this ultimately is up to you, I can give you some information on recent progress with a few of the top gold stocks today.
Harmony Gold Mining (HMY)
Last week, Harmony Gold Mining (HMY Stock Report) stock reached $4.67 before the long weekend. On July 6, shares hit $4.75 during the morning session. This is the highest the gold stock has traded since August of 2016. This move continued on Tuesday. HMY broke above $5 and hit a high of $5.04 during the lunch hour on July 7.
There hasn’t been any new updates from the company this month. The company has operations in South Africa and Papua New Guinea. At the end of June the company said that it intends to raise about $200 million to part-finance the company’s Feb. 12 agreement to acquire AngloGold Ashanti’s South African assets.
New Gold Inc. (NGD)
Another one of the gold penny stocks surging on July 7 was New Gold Inc. (NGD Stock Report). While the stock didn’t hit new 2020 highs, it did have one of its biggest 1-day moves in recent months. NGD stock opened at $1.30 and reached highs of $1.40 by the lunch hour. The last time New Gold stock moved over 7% in a single day to the upside was on June 10th. that was 1-day prior to shares reaching 2020 highs of $1.53.
At the end of June, the company announced that it completed its offering of $400 million aggregate principal amount of 7.50% Senior Notes due 2027. New Gold said it intends to use the net proceeds from the offering of the Notes, together with cash on hand, to fund the redemption of its outstanding 6.25% Senior Notes due 2022 on or about July 10, 2020.
AngloGold Ashanti Ltd (AU)
On the higher priced side of things, not many gold stocks reached new records this week. Many, like Newmont gold stock and Barrick gold stock were still in recovery mode. However, AngloGold Ashanti Ltd (AU Stock Report) saw its shares reach a new 2020 high on July 7th. AngloGold’s stock price broke above $30.75 for the first time since January 2013.
In June, AngloGold said it plans to gradually ramp up to half of its capacity at the gold mine in South Africa. “Our aim is a gradual ramp up to 50% capacity,” spokesman Stewart Bailey said in an emailed statement to Reuters. Obviously, as Harmony is in the process of getting money together, we’ll see what happens with the ownership of these mines as the story develops.
B2Gold Corp. (BTG)
Similar to Harmony gold stock B2Gold Corp. (BTG Stock Report) reached a new 52-week high on Tuesday. However, since the stock broke above $5.80 for the first time this year, in doing so, it also set a new all-time high for BTG stock. Last month, the company 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.
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