With More COVID Cases, Will This Trigger Another Rally In Gold?
As investors and traders, we want to look at what’s going on in the world. The next step is understanding how to use that info and apply it to the stock market. It’s also good to know how world events will affect the market. We have a lot of uncertainty going on right now. When this happens, most of the time people will start investing in gold stocks. Gold is known as a safe haven for investors during rough times. Now, let’s look at some of the world events that could affect gold and gold stocks.
The first that comes to mind is COVID 2.0. After finding out about the pandemic this year, markets pulled back as expected. But after that drop, the stock market simply reacted like it was nothing. Initially, some think we got our “V-shaped” recovery. The country began reopening with hopes that we would not have a bad “round 2.”
If this, however, becomes the case and things must shut down again, it could cause gold to shoot up. One thing I want you all to notice is how gold is holding up even with markets up back near highs. This could be traders hedging against the market volatility, in my opinion.
Gold Stocks, China Trade War, & 2020 Elections
The next event that keeps coming up is the trade war. The last time gold went up and tried to break up though $1,800 was during the trade war. It has taken a back seat to COVID 2.0 but we still have to keep this situation on watch. This could also cause gold to push higher.
Last, are the elections coming up in November. I never mix politics with stocks. But we must know how it could affect the market. If Trump losses, we could see a nasty pullback in the markets which might boost gold up as well. However, there is still a long road ahead where a Biden win could see the market jump.
But at this point, who knows? With all of these uncertainties in the world could we see gold sitting up above 1,800 by the end of the year? Let’s talk about a few of my favorite gold stocks to watch.
Barrick Gold Stock
First is Barrick Gold Corp (GOLD Stock Report). The stock is trying to hold its 50-day moving average at $25.55 but has room to also pull back to the 8-day EMA, which is called the trade line at $25.00. To the upside, the stock is still well-off of its 2020 high of $28.50. On 06-24 Barrick announced the creation of a gold royalty corp and expanded its JV relationship with Loncor Resources (LONCF Stock Report).
Eldorado Gold Stock
The second gold stock is Eldorado Gold (EGO Stock Report). This gold stock is also trying to hold its 50-day moving average at $8.88 and has the trade line at $8.80 right behind it to hold as support. To the upside, EGO could be looking for a push, to test $10.00. On June, 8 the company provided an update on its mines in Greece. “We are pleased to begin construction of the decline at Lamaque this summer. This is a project that we have been advancing for nearly a year and is another step towards further production growth and continued value creation at Lamaque. We would like to thank the government of Quebec and all our local stakeholders for their continued support for this project and our Lamaque operations,” said George Burns President and CEO.
Gold Fields Stock
Finally, Gold Fields LTD (GFI Stock Report) rounds out this short list of gold stocks. Gold Fields is trading well above its 50-day moving average at $7.77. This is bullish and suggests nice support on any pullback. In front of the 50-day moving average, we have the trade line at $8.32. This would be the first area of support. The gold stock has room between current levels and up to $10.24 which would fill its previous “gap-down” for February 2013.
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