This has already been a historic week for gold and several gold stocks. Something happened this week that has never happened before. History was made after the price of gold surpassed its 2011 highs and made new all-time highs of $1,941.90. Unlike the last time gold prices made history, there wasn’t an immediate sell-off.
In fact, the very next day, July 28, there was another all-time high gold price put in. This time it was significantly higher at $1,974.70. On Tuesday, the breakout was more abrupt and in turn, we saw the price of gold end up consolidating later in the day. The question is still being asked as to whether or not gold prices can maintain these new, historic levels.
In an interview, Francis Tan, an investment strategist at UOB Private Bank, told the Wall Street Journal that, “Tech stocks are the new defensive. Gold is seemingly going higher because the U.S. dollar is dropping.”
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He also said uncertainty about the global economy was driving up prices of traditionally defensive assets such as gold, as well as new-economy companies seen as resilient during the pandemic-induced recession. The Federal Reserve holds its regular meeting this week, and investors are expecting the central bank to remain supportive of the economy. With so many fundamentally supportive chess pieces in place, is this just the beginning for gold?Is There A Brighter Future For Gold Stocks In 2020?
Even though the “warning signs” have been there for months, more analysts are jumping on the golden bull right now. “What is really significant is how quickly it went through that $1,923 which was the previous high. The other thing which was … very, very important was the fact that it went through $1,800 and with similar ease,” said Barry Dawes, executive chairman at Martin Place Securities. “That’s basically saying to me that this is a very, very strong market.”
“I’m looking for $3,500 within two years”Barry Dawes on CNBC’s Street Signs Asia
Juerg Kiener, managing director of Swiss Asia Capital, is also bullish on gold right now. He’s said, “If you look at the technical picture, you could actually take this gap from the bottom up and going to the top, that gives you about $2,834 and that would be (an) initial target probably that you could achieve quite fast.”
Are analysts overly optimistic right now or not bullish enough? That’s an honest question considering the economy is still shut down for the most part, and fundamentally, we’re still in a low rate environment with “trade war” still a big topic of discussion right now. Furthermore, we’ve got the yield curve basically flat and real yield returns moving into negative territory in a number of countries. This doesn’t appear to be a short-term event either. Many see the low rate environment being a driving force for mid- and even long-term timeframes.Top Gold Stocks To Watch This Summer
Will gold prices consolidate aggressively? We’ll likely see the answer to that question later this summer. After such a big move up, the strength of gold doesn’t look bad. But we all are familiar with market metrics influencing prices. In the long-run, however, gold stocks remain a high-point. That’s why we’re seeing many gold stocks reach new 52-week and in some cases, all-time highs this week.Top Gold Stocks To Watch: Agnico Eagle Mines Ltd.
Shares of Agnico Eagle Mines Ltd. (AEM Stock Report) hit new 52-week highs on July 28th. During the early morning session, the gold stock hit $75.51. It was interesting to watch this gold stock trade on Monday during the premarket. I say this because AEM stock reached highs of $76 during the very early hours of the premarket session. All-time highs for the gold stock still sit at $88.20, which was reached in 2010.
Barclays recently lifted its price target on Agnico Eagle. Its previous target was set at $68 and last week it lifted that target to $71 with a reiterated Overweight rating. The company operates mines in Canada, Mexico, and Finland. It also owns 50% of the Canadian Malartic mine.
Agnico operated just one mine, LaRonde, as recently as 2008 before bringing its other mines on line in rapid succession in the following years. The company produced nearly 1.8 million gold ounces in 2019. Agnico Eagle is focused on increasing gold production in lower-risk jurisdictions.Top Gold Stocks To Watch: B2Gold Corp.
Are you tired of reading about B2Gold Corp. (BTG Stock Report) yet? It seems like this gold stock has held a leading role on watch lists this week. That’s for good reason, however. Day after day, BTG stock reaches not only new 52-week highs but new all-time highs as well. On July 28, shares hit $6.91 and beat its previous all-time high by a penny. But it is what it is and the scoreboard speaks for itself.
B2Gold stock has been a force to reckon with ofr the last month and a half. From June 18th on, BTG stock not only climbed in price but the rate of increase what much greater than it has seen in quite some time. Furthermore, since the gold sector sell-off in March, BTG has rallied by as much as 220%.
Earlier this month the company announced its gold production and gold revenue for the second quarter and first half of 2020:
- Consolidated gold production of 239,574 ounces, above budget by 3% (7,327 ounces) and a significant increase of 15% (30,684 ounces) over the second quarter of 2019 (excluding discontinued operations of El Limon and La Libertad)
- Total gold production of 241,593 ounces (including 2,019 ounces of attributable production from Calibre Mining Corp. (“Calibre”))
- Record quarterly consolidated gold revenue from the Company’s three operating mines of $442 million, a significant increase of 65% ($175 million) over the second quarter of 2019 (excluding discontinued operations)
Coeur Mining Inc. (CDE Stock Report) is another one of the gold stocks experiencing an explosive move in the stock market today. Shares reached a high of $8.50 during the first half of the Tuesday session. But even with the price of gold surging, it’s hard to ignore this trading level. Why say that?
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If you take a look at the CDE stock chart, you’ll see that back in 2018, and again at the end of 2019, this range between $8.15 and $8.75 has been a relatively solid area of resistance. In fact, CDE stock hasn’t been able to trade significantly outside of that higher-end since the end of 2017. Even then, this same range presented more of a pivot point on the chart than anything else. Will the strength of gold be able to finally propel CDE stock through this area of resistance?
Canaccord Genuity recently upgraded Coeur to a Buy. It also announced a price target of $8. This upgrade followed RBC Capital also adjusting its expectations on the stock. The firm increased its price target from $4.25 to $6 and maintained the stock at Sector Perform. The company reports earnings this week after the market closes on July 29th.