These Gold Penny Stocks Are Heading Higher On Friday
When you talk about mining stocks when precious metals prices climb, you can’t ignore gold penny stocks. These low-priced “gems” tend to outperform their higher-priced counterparts especially during times of bullish trading. On the other hand, they also fall faster during market routs. Needless to say, with broader sector stocks pulling back on Friday, gold stocks are a focus.
Things didn’t get off to a great start on June 26. Despite hitting a new high of $1,796.10 earlier in the week, gold prices have slid slightly. During the Friday session, the price of gold dropped to a low of $1,754. But in true bullish fashion, the v-shaped recovery kicked in shortly after with prices rallying back above $1,780.
In general, the drop in global mining production from the shutdowns helped buoy prices of both commodities. John Caruso, senior asset manager at RJO Futures explained that following the broad-based market crash, “you naturally get a synchronized response from global central banks,” and that, “There’s a lot of global stimulus and liquidity being issued to markets that are specifically meant to boost U.S. dollar-denominated asset values.”
Furthermore, we still are far from “out of the woods” when it comes to coronavirus. Growing case numbers have fueled more concerns of a second shut down. Many cities have already halted additional phases to the phased reopening plans in place. This doesn’t even account for anything going on between the U.S. and China. So with so many headwinds faced by the stock market, the current climate could be presenting new opportunities for gold stocks to shine.
Gold Penny Stocks To Watch: New Gold Inc.
New Gold Inc. (NGD Stock Report) has been on the move ever since the mid-March drop. Similar to most gold stocks (not just gold penny stocks), NGD battled back in one of the longest periods of bullish momentum in some time for the stock. Earlier this month, New Gold announced that it entered into a definitive agreement with Artemis Gold Inc. This was to divest its Blackwater Project located in British Columbia, Canada.
The company also launched an offering of $400 million aggregate principal amount of Senior Notes due 2027. New Gold 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, and to pay related fees and expenses.
Keeping the ball going down field seems to have been received with short-term skepticism as shares dipped after the news broke. However, since June 17, it seems that gold prices took back control of the directional move of New Gold stock. Shares are roughly $0.20 shy of retesting its 2020 high.
Gold Penny Stock To Watch: Harmony Gold Mining Co
Shares of Harmony Gold stock (HMY Stock Report), for the most part, have held an uptrend for the better part of the last week. After dropping from May highs of $3.98, shares bounced from a low of $2.93 on June 15 to a high of $3.63 on the 26th. This month, Harmony Gold Mining’s Chief Executive Officer, Peter Steenkamp, said at a general shareholders’ meeting the company expects to return to full production toward the middle of July.
If you remember from April, Harmony said it will resume operations at its underground mines at up to 50% capacity. This came as the South African government relaxed restrictions imposed during the COVID-19 national lockdown.
In addition to that, Harmony plans to raise around $200 million. The proceeds will be used to part-finance the company’s Feb. 12 agreement to acquire AngloGold Ashanti’s (AU Stock Report) South African assets. These include Mponeng and Mine Waste Solutions.
Gold Penny Stocks To Watch: Alio Gold Inc.
Similar to New Gold stock, Alio Gold Inc. (ALO Stock Report) shares have been in a consistent uptrend ever since mid-March. At the time, ALO stock traded as low as $0.278. As of June 26th, the gold penny stock reached a high of $1.19. This 328% move wasn’t just a product of surging gold prices.
The big focus has been around a proposed merger. After months of lead up, Argonaut Gold Inc. and Alio Gold Inc. announced in May that shareholders of both companies approved the transaction announced on March 30, 2020. This month the company announced receipt of the clearance decision from the Comisión Federal de Competencia Económica.
This was the final government agency approval required before completing the merger. Since it is anticipated to occur between June 29, 2020 and July 3, 2020 will Alio Gold stock be one to watch heading into Q3?
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