Are These Gold Stocks On Your Watch List This Month?
As we enter the second half of September, investors are increasing their exposure to gold stocks. After gold hit a per ounce high of $2,067 in mid-August, investors began to take interest in finding gold stocks to watch. In the past month, major money movers like Warren Buffett, have begun to invest in the shiny metal. There are a few reasons why gold stocks may be the right call for some investors. For one, gold can be a viable way to store wealth when economies are awry. With COVID-19 affecting world markets, investors have found gold to be a stable asset that is ripe with potential.
In addition, gold can be added to an existing portfolio to help diversify one’s assets. Because diversification is so important for investors, gold stocks are often a popular choice. While investing in gold can bring upside potential, many investors simply use it to stabilize their portfolios.
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Gold has historically been a low volatility investment that investors turn to in times of economic turmoil. While gold stocks may not climb as quickly as more volatile stocks, there is a lot of value in a stable investment. For this reason, let’s take a look at some top movers and shakers in the gold industry.
What’s Happening In Gold Stocks In September?
The week of September 7th showed some positivity for gold stocks. The December gold futures were trading at roughly $1950 per ounce, which is an increase of roughly 2% over the prior week. One senior analyst stated that “we were testing support at the 50-day moving average and now we are up on the week challenging the 20-day moving average. I think the path of least resistance is up.”
By the end of September, we should have an idea as to what the Federal Reserve is doing in regard to its inflation target. The goal is to hit an average of roughly 2%, which would be good news for gold. With that in mind, investors should continue to stay up to date on the latest news that gold has to offer.
Gold Stocks to Watch: Freeman Gold Corp.
One of the gold stocks that has been gaining more attention is Freeman Gold Corp. (OTC:FMANF Stock Report)(CSE:FMAN). While Freeman may be an early-stage company, it has managed to gain momentum quite quickly. The company focuses on buying land which it then develops into large scale mining operations.
Freeman Gold has acquired a back-in right from Yamana Gold Inc. over the Lemhi Project. This was a huge development for Freeman as it not only de-risks the project but also brings Yamana in as an equity holder of Freeman. The company has issued Yamana 4,035,273 common shares or roughly 5% of its shares. This deal offers two major positives for the two companies. For one, it allows Freeman Gold to utilize Yamana’s expertise in the gold industry. Yamana Gold is considered to be one of the major gold stocks in the industry due to how long it has been around and its success in the industry.
Having a major gold producer with Yamana’s caliber take a significant position in our Company is a major vote of confidence in the project and the team we have assembled.Will Randall President & CEO of Freeman Gold Corp
This summer, Freeman began a 5,000-meter diamond drill program at Lemhi. This is intended to confirm historical data and allow the use of over 355 historical drill holes in a National Instrument resource estimate. Results include 1.80 grams per tonne gold over 193 metres, 3.94 gpt Au over 56 meters, and 1.81 gpt Au over 179.83 meters. Major Drilling America Inc has been awarded the diamond drill contract. The company also expects to complete a twin and infill program by November with a maiden resource estimate before the year-end.
Gold Stocks to Watch: Yamana Gold Inc.
Yamana Gold Inc. (AUY Stock Report) is a producer of several precious metals including gold and silver. Currently, Yamana operates several key mines around the world in countries like Canada, Argentina, Chile, and Brazil. While it does mine other resources, as the name suggests Yamana focuses mostly on gold mining. Its main mining properties are the Chapada and Jacobina mines based in Brazil as well as the Malartic mine in Canada.
After hitting a low of around $2.50 in mid-March, AUY stock has since shot up by over 140% to its mid-September price of roughly $6.20. One of the main drivers for AUY stock’s incredible growth is the overall market uncertainty that we have seen. With COVID and other factors affecting industry growth, many investors have turned to gold.
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In addition, Yamana Gold has done a lot to make its business look attractive to investors. In its most recent second-quarter report, Yamana reported that its free cash had grown year over year by around 50%. This represents a dollar amount of roughly $92 million. In addition, the company has continued to increase the number of dividends that it pays out. As of mid-September, that number sits at around $0.016 per share. With Wall Street predicting AUY stock’s EPS to grow by 40% in the next half-decade, Yamana Gold continues to look like an attractive gold stock to watch.
Gold Stocks to Watch: Gold Fields Limited
Gold Fields Limited (GFI Stock Report) is one of the active gold stocks we’ve discussed several times this year. Sporting a market cap of roughly $12.7 billion as of mid-September, GFI stock has gained a lot of attention for its sheer size. The company has been working in the exploration, extraction and processing of several gold mines across the world. This includes mines in South Africa, Australia, Peru and Ghana.
On September 14th, Gold Fields Limited shot up by as much as 13% during intraday trading. During the trading day, GFI stock hit highs of $14.62 before stabilizing around the $14.50 mark by the close. Year to date, GFI stock is up by as much as 112% which is quite substantial. It also reached a fresh, 52-week high on Monday.
One of the main reasons for this gain is the fact that the company has been able to produce gold at a cost of around $1,000 per ounce. As with many other gold stocks, Gold Fields price is pegged to the increase or decrease in the price of gold bullion. What makes Gold Fields interesting to investors is that it often is more volatile than other gold producers. This means that the potential for gains (and losses) is greater than the industry average. Investors should weigh these factors before deciding as to whether or not Gold Fields is a gold stock to watch.
Mining Stocks to Watch: First Majestic Silver Corp.
First Majestic Silver Corp. (AG Stock Report) is a precious metals mining company. Although its name suggests that it only produces silver, First Majestic generates roughly 40% of its revenue from gold. Because it does work with both silver and gold, many investors believe that First Majestic is a more diversified gold stock to watch. In mid-March, First Majestic hit a major low before rallying back 112% to its September 13th price of $12.40 at the end of day. In that same time frame, silver is up by as much as 40% which explains why First Majestic has rallied so much.
Analysts have concluded that silver is one of the more volatile precious metals to invest in. Often times, silver can be much more volatile than gold. But because First Majestic works with both precious metals, it has been able to mitigate its exposure to silver’s volatility.
In 2018, First Majestic produced as much as 22.2 million ounces of silver, beating all its previous records. In 2019, the company produced as much as 24 million ounces. This growth shows that the company is committed to finding and mining as much as it can. Precious metals stocks have a lot of potential on the horizon. For that reason, First Majestic remains a diversified gold stock to watch.
Last week, the company reported a $78M CAD bought deal investment by billionaire Eric Sprott. The Company expects to use the net proceeds of the Offering, together with the Company’s current cash resources, to develop and/or improve the Company’s existing mines and to add to the company’s working capital.
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