SAND - Gold Prices Continue To Blow Away Expectations After New August Highs
The better part of the last 8 months has seen gold prices explode. Over the last few weeks, in fact, the price of gold has made new all-time high after new all-time high. What’s more, is that gold has absolutely shattered analysts’ expectations from some of the biggest banks on Wall Street.
Keep in mind that it wasn’t that long ago that many were calling for $2,000 gold in the next 12 months. Citi (C stock report), Goldman Sachs (GS stock report), and Bank of America (BAC stock report). Goldman even raised its expectations for gold prices.
The investment bank previously estimated gold prices to reach $1,800, $1,900, and $2,000 within the next 3,6, and 12-months respectively. That has obviously come to fruition sooner than later as gold prices today are within $22 of reaching the top of that range.
Are Analysts Still Bullish On Gold?
HSBC Chief Precious Metals Analyst James Steele said in an interview, “The two most populous nations in Asia are also the world’s two largest gold importers and consumers. Further escalation in risks could prompt greater gold purchases. Gold may dip near term, but $1,700/oz should hold. It looks to us that there is sufficient risk to support gold as the year unfolds. We also look for silver to trek higher, aided by gold.”
One analyst that hasn’t been “beat” yet is Diego Parrilla who heads the $450 million Quadriga Igneo fund. Parrilla explained that unprecedented monetary stimulus is fueling asset bubbles and corporate debt addiction. This, he said, is rendering interest-rate hikes impossible without an economic crash. Parrilla’s expectation is high for gold as well. He thinks it could rise to $3,000 to $5,000 an ounce in the next three to five years. Thanks to unlimited QE many agree with higher gold prices as well.
The Federal Reserve has gone past the point of no return and is unlikely to be able to unwind their balance sheet in the foreseeable future, according to best-selling author Jim Rickards and Peter Schiff, CEO of Euro Pacific Capital.
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“I don’t even think it’s a theory because we already know it doesn’t work, so there’s nothing theoretical about it. We’ve had plenty of examples in history where currencies have been destroyed based on what they now call Modern Monetary Theory. The whole idea that you could print all this money and not have inflation…printing money is inflation, so by definition, you’re creating inflation,” Peter Schiff said.
Top Gold Stocks To Watch: Sandstorm Gold Limited
Sandstorm Gold stock price has reversed course on Tuesday. Shares of the gold stock jumped from a morning low of $9.28 to highs of $9.80 heading into the lunch hour on August 4th. A surge in gold prices hasn’t hurt this momentum in Sandstorm Gold (SAND Stock Report) either. There weren’t any major headlines to go along with the move. However, the company is coming into August after announcing its latest round of earnings.
Sandstorm’s revenue during the second quarter of 2020 was $18.7 million. This was compared with $21.5 million for the comparable period in 2019. The decrease is largely due to a 33% decrease in the attributable gold equivalent ounces sold, partially offset by a 31% increase in the average realized selling price of gold.
However, net income was higher when compared to the same period in 2019. The company said it was primarily due to a $3.7 million increase in the gains recognized on the revaluation of Sandstorm’s investments. A gain of $5.1 million was recognized during the second quarter of 2020 largely driven by an increase in fair value of the Americas Gold and Silver Corp. convertible debenture and Equinox Gold Corp. warrants. Other factors impacting the increase in net income include a $2.1 million decrease in the cost of sales, partly due to a decrease in the attributable gold equivalent ounces sold.
Top Gold Stocks To Watch: Kinross Gold Corp
Kinross Gold Corp. (KGC Stock Report) came within striking distance of testing new 52-week highs on Tuesday morning. The was set on Monday when Kinross gold stock reached $9.46; highs on Tuesday morning were $9.45.
Kinross also reported earnings recently. The company recorded an EPS of $0.15 on sales of $1.01 billion for the second quarter. This exceeded the street on EPS and was in line with revenue expectations.
J. Paul Rollinson, President, and CEO made the following comments in relation to 2020 second-quarter results, “Kinross had a strong second quarter, as we generated robust free cash flow, more than doubled earnings year-over-year, and continued to strengthen our investment-grade balance sheet. Our margins increased 53% year-over-year, well above the 31% increase in the average realized gold price. Our portfolio of mines performed well and continued production during the quarter, with our three largest producing mines — Paracatu, Kupol and Tasiast — delivering the lowest costs.”
[Read More] Is It Time To Get Bullish On Barrick Gold Stock?
Last month the company announced the results of a pre-feasibility study for its Lobo-Marte project in Chile. Kinross said that Lobo-Marte offers the potential of a cornerstone asset with attractive all-in sustaining costs to enhance its long-term production profile. The project adds 6.4 million gold ounces, representing an approximately 25% increase, to Kinross’ 2019 year-end mineral reserve estimates. The reserve addition also increases Kinross’ reserve life index by approximately 2.5 years.
Top Gold Stocks To Watch: IAMGOLD Corp.
IAMGOLD Corp. (IAG Stock Report) also saw an uptick in trading momentum on August 4th. The gold stock jumped to highs of over $5.05 for the first time in 3 days. There hasn’t been much news recently from the company. At the end of June, IAMGOLD secured a key permit for its Cote Mine project in Northern Ontario. Final publication of the Environment Canada opinion was expected July 8, the company said.
IAMGOLD and minority partner Sumitomo Metal Mining are expecting to produce around 460,000 ounces of gold annually during the first six years of operations at the proposed mine. The companies previously signed impact and benefits agreement with nearby First Nations and other permitting efforts were continuing, they said.