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The Price Of Gold Set New Highs In July; Can It Hold?

During the better part of the last year or so, gold has been on the rise. Since July 9, 2019, the price of gold has risen by as much as 31.8%. This has come amid key geopolitical and now, geo-economic risk factors. In 2019 the big topic of conversation was the U.S./ China trade war. While the stock market roared higher, underpinnings of trade risk persisted. This is when we began to see the price of gold slowly creep higher.

Fast-forward to 2020 and now we’ve got a whole new issue to take under consideration. Initially stemming from the coronavirus pandemic, global economies are stalling. Despite the latest jobs figures suggesting things could be getting better, the hidden figures could come later on. Over the last week or so, we’ve seen cities go back into shut-down mode. In Miami, for instance, its Mayor closed down indoor dining once again. Big concerns obviously resulted in that “what will employers do now? Tell their employees they are out of work…again?”

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Unemployment claims are falling. But 1.3 million still applied for assistance last week. On top of that, the story doesn’t look quite so good without the seasonal adjustment. These adjustments are used to smooth out the data in normal times. On an unadjusted basis, 1.4 million people filed first-time claims, a decrease of some 32,000 people from the week before. In addition to those filing for traditional benefits, just over 1 million people in 49 states claimed first-time pandemic unemployment assistance last week, about 42,000 more than the week before.

Is This More Evidence That Safe-Havens Could Attract More Investor Interest?

Gold has always acted as a hedge against risk. This is a typical rule of thumb for investors. But given the uncertain state and questionable data, will gold be the main choice for “smart-money” in the long run? The data I’m referring to isn’t just jobs data but overall ecnomic data as well. Figures out of China’s economy would suggest an upbeat picture. Meanwhile, reports cite that the People’s Republic “suggested” to their retail investing public to flat out buy stocks. We saw evidence of this last week when a surge in China markets resulted in a boost in the U.S. the following day.

Needless to say, there should also be some caution taken. While the upbeat sentiment is great and I’m sure many want the market to go up. We’ve also got all of that fiscal stimulus to think of; but more so down the road. With trillions of dollars flooded into the market, the economy, and the banking system, how will that get reconciled, and will it impact the market?

[Read More] Gold Hits $1,800; 1 Firm Expects $1,900 Near Term

“I guess gold is the real bitcoin,” Boris Schlossberg, managing director of FX strategy at BK Asset Management joked on CNBC’s “Trading Nation” on Wednesday. “Ultimately I think what’s happening is the market is taking implicit bets that inflation is starting to pick itself back up, and I think there’s a really good reason why the market thinks so.”

High-Volume Gold Stocks To Watch

When it comes to gold stocks, they’ve been taking cues from the actual price of gold lately. You may say, “well that’s obvious” but if you look at late last year, some stocks were outperforming gold as news and updates were released. Despite this as the case, there are plenty of high-volume gold stocks to watch this week. Some of them have also reached new 52-week highs for multiple consecutive days. Here are the Top 5 Gold Stocks based on highest volume on Thursday morning:

CompanySymbol2020 High (To Date)
Harmony GoldHMY$5.87
Kinross GoldKGC$7.97
Yamana GoldAUY$5.73
Barrick GoldGOLD$28.50
Gold FieldsGFI$10.58

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