KGC - Top Gold Stocks To Watch After New COVID Data Emerges
Gold stocks and the price of gold rose on Monday after a busy weekend of headlines. Aside from the major issues around police protocols, coronavirus cases rose once again. The new wave of cases has spread from Arizona to Florida and many states in between. Beijing reported even more cases that caused officials to lock down a section of the city.
Meanwhile, the FDA has gone as far as withdrawing emergency approval for malaria drugs that were touted by President Donald Trump. All of this points to continued unrest, uncertainty, and an undeniable argument in favor of gold. While the U.S. dollar held some strength at the top of the week, it didn’t mute momentum for gold. Futures rose to highs of over $1,730 after falling earlier in the day to lows of $1,706.20.
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This $1,700 area for gold prices continues to be a pivot point for gold prices. Additionally, gold has also traded in a relative trend with that of its 50-day moving average for the last year. A year ago, this time, gold was trading under $1,340. Where U.S. and China trade talks had initially sparked gold’s rally, coronavirus and the latest series of global economic slow-downs has amplified idea of safe-haven stocks becoming a stronger asset class.
Top Gold Stocks To Watch
For the most part, the top gold stocks have mirrored the move of gold prices this year. Where some of the junior gold stocks jumped on company-related news, the majority ebbed and flowed with gold prices. “On this day traders appear more focused on the bearish prospects of reduced consumer demand for precious metals due to hobbled economies, than on their safe-haven aspects,” wrote Jim Wyckoff, senior analyst at Kitco.
Barrick Gold
Barrick Gold stock (GOLD Stock Report) surged in early morning trading. Last week, shares tumbled and failed to break above the 50 Day Moving Average. Where some may have assumed the slide to continue, Barrick gold stock actually rebounded on June 15th. Shares jumped from premarket lows of $22.53 to highs of $24.67 during the normal session.
S&P recently revised its outlook on Barrick Gold stock to “Positive” from “Stable”. “We estimate Barrick will generate more than US$1 billion in annual free cash flow in the next two years, based on average gold prices well below prevailing levels. While dividends will remain a material use of cash flow, we assume steady improvement in the company’s net debt position,” the firm wrote.
Further balance-sheet strengthening should reduce the sensitivity of Barrick’s credit ratios to lower gold operating margins.
Franco-Nevada
Franco Nevada stock (FNV Stock Report) is another one of the top gold stocks rebounding on Monday. Shares dipped to a low of $125.01 during the morning session and managed to bounce back above $130 by the afternoon. This was the second time in a week that Franco Nevada stock tested the $125 area.
This is a level it hasn’t seen since April. Still, though, FNV maintains a general level of support around its 50 Day Moving Average. As it’s slightly lower right now, Franco Nevada stock has stuck close during recent sessions. In May, Deutsche Bank lifted its price target on Franco Nevada stock. Previously, the firm set a target of $100 but since boosted that 27% to $127 while keeping its Hold rating.
Kinross Gold
Kinross Gold stock (KGC Stock Report) also mimicked the 2-day trend of Barrick and Franco Nevada. Where the others are moving on simple sector momentum, Kinross also has a news catalyst to consider. The company announced that it has reached an agreement in principle with the Government of Mauritania to enhance the parties’ partnership.
The key terms of the agreement are the culmination of discussions between Kinross and the Government that balances the interests of both parties. The terms cover reasonable commercial trade-offs intended to provide certainty and resolution of outstanding matters.
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J. Paul Rollinson, Kinross President and CEO, commented on the agreement: “We are pleased to see further development of a positive foreign investment climate in Mauritania with this successful outcome of our discussions with the Government, along with the IFC-led Tasiast project financing signed in December 2019 . This balanced agreement will deliver increased stability, position Tasiast for long-term success, and provide enhanced benefits to Mauritania and its people.”