Mining & Metals Stocks Climbed Higher As Markets Fight For Direction
If you’re looking for opportunities in the stock market today, do some digging. As broader indexes seek out clear direction, metals and mining stocks are surging, all jokes aside. If you take a look at some of the popular stock market ETFs. The top 5 includes two which directly involve mining stocks:
Inflation and interest rate fears have gripped the windpipe of the stock market this week. Following a brief relief rally thanks to comments from Fed Chair Jerome Powell, broader markets dropped heavily during the second half of the week. What was the main culprit? The Bank Of England’s surprise rate hike. Thursday, the BOE blindsided markets and increased its benchmark for the first time since the start of the 2020 pandemic. Borrow costs rose to 0.25%, and economists don’t expect this to be the last rate bump by a long shot.
Virus Fears Add To Investor Concern
Meanwhile, a resurgence in virus fears has begun making its way through the stock market today. On Friday, the Biden administration said that it would push for a “Test-To-Stay” policy to keep children in school.
“If exposed children meet a certain criteria and continue to test negative, they can stay in school, instead of quarantining at home,” CDC Director Rochelle Walensky said during a briefing. “These studies demonstrate that test-to-stay works to keep unvaccinated children in school safely.”
Several schools have started going to virtual classes ahead of holiday breaks. This has sparked new concerns that a sweeping remote learning trend may come back into play.
Mining & Gold Stocks To Watch
When markets get fearful, investors tend to move toward safe havens. Despite the overall price trend this year, the last week has seen renewed interest in precious metals. Gold is up roughly 1.3%, and silver prices have climbed about 2% since the beginning of the week. Thanks to new economic and health concerns, safe haven stocks have come back into focus. Today we look at a handful gaining momentum.
- Kinross Gold Corp. (NYSE: KGC)
- Barrick Gold Corporation (NYSE: GOLD)
- Pan American Silver Corp. (NASDAQ: PAAS)
Kinross Gold Corp. (NYSE: KGC)
Quite possibly, one of the hardest-hit gold stocks this quarter was Kinross Gold. Since mid-November, the gold penny stock has deteriorated from highs of over $7 to new 52-week lows of $4.90 earlier this week. This was partially due to the company’s Great Bear Resources buyout. Worth $1.42 billion, the buyout was seen as the “great bear catalyst” to take the stock lower.
However, if you look at the KGC stock chart, you’ll see that there’s been an aggressive move higher. The initial spark was triggered following the BOE’s latest rate surprise, and that trend has continued on Friday.
Since hitting the new 52-week lows, KGC stock has firmly rebounded by as much as 15%. Additionally, the analyst community remains bullish on the beaten-down mining stock. Even in light of the Great Bear buyout, Bank of America analyst Michael Jalonen reiterated his Buy on the stock along with a target of $9.60.
He expects Great Bear’s Dixie project to be accretive to Kinross’s net asset value. He also expects Dixie’s NI 43-101 gold resource report early next year. “The question is, will the market reward KGC for a project still years away from production?” he said in a recent update. Other analysts, including RBC Capital, remain optimistic as they’ve maintained an Outperform on KGC stock. However, the firm cut its price target to $6.50 from $7.
Barrick Gold Corporation (NYSE: GOLD)
Similar to Kinross, Barrick Gold has crumbled since the middle of November. It also reached new 52-week lows this week, hitting $17.27. This is a level that GOLD stock hasn’t seen since March of 2020, stoking concern in the market for the precious metals company. Against this backdrop, shareholders have also battled with worries over the company’s human rights issues. Barrick’s latest report cited updated standards and developed new Voluntary Principles on Security and Human Rights standards.
“Our policy, simply put, is to respect the human rights of all individuals impacted by our operations, including employees, contractors, and external stakeholders. Wherever we operate, we seek to avoid causing or contributing to human rights violations and to facilitate remedial action. The policy is guided by our philosophy of building mutually beneficial relationships with our local communities.” – CEO Mark Bristow.
GOLD stock has made a substantial rebound over the last few sessions. Barrick shares climbed to highs of $18.85 during Friday’s morning session.
Pan American Silver Corp. (NASDAQ: PAAS)
With silver prices gaining momentum, silver stocks are benefiting this week. The trend for Pan American Silver is similar to other metals and mining stocks on this list. However, recent news has compounded the rebound in this silver stock. In addition to precious metals climbing, PAAS stock has pushed higher after reporting on the status of new legislation in Argentina.
A new bill was recently approved that would change the mining law to allow permitting of open pit mining in certain zones. Since Pan American Silver owns 100% of the Navidad silver project in the Chubut Province of Argentina, this decision could directly influence operations. Pan American believe that this initiative could benefit the people of Chubut.
Read more: Hot Silver Stocks To Buy In December?
Thanks to the latest surge in inflation and rate fears against the backdrop of increasing virus cases, precious metals stocks could be on the watch list.
Mining & Metals Stocks
Share prices for mining and gold stocks have been muted for the better part of the last month. Due to more dovish rate discussions from the US Federal Reserve, there hasn’t been much of a need to head toward safe-havens. However, the shakeup due to the Bank of England’s latest move has made some investors rethink things a bit. In light of this, now could be an important time to have sector stocks on your list heading into year-end.
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