NGD - Where Do Gold Stocks Go From Here?
Which Gold Stocks Are On Your List Right Now?
Gold stocks started the week on strong footing Monday morning. Helped by new coronavirus cases and potentially new stimulus measures, the price of gold jumped to $1,823.40. This rising gold price also took plenty of gold stocks higher too.
“Precious metals have started the week on the front foot, despite growing fears of renewed stay at home orders in major US cities, most recently being Los Angeles,” TD Securities’ strategists write. “As we have witnessed in the past, gold does not hedge against a deflationary shock such as the virus, but so far inflation expectations have managed to hold firm in face of the latest worries. We expect that these common drivers will continue to drive capital to shelter itself from negative real yields in both risk assets and real assets, and therefore, we argue that money managers need not be concerned about trading gold in a risk-on environment.”
On top of that, we’re seeing most major gold ETFs reaching new 52-week highs this week. VanEck Miner and Junior Miner ETFs hit $40.49 and $56.77 respectively. The SPDR Gold Trust (GLD) also scratched a new high into this year’s history book. During the early morning session, GLD hit a high of $171.07.
[Read More] Is It Time To Get Bullish On Barrick Gold Stock?
According to the World Gold Council, the above-ground stock of gold in 2018 was 194,112 tonnes (6.2 billion ounces). In 2019 there was 3,480 tonnes (112 million ounces) of gold added to the above-ground stock from mining, which translates to a supply increase of 1.8%. This limited supply that has grown at roughly 2% per year throughout history is a key reason that gold has functioned as a currency, store of wealth and inflation hedge.
Top Gold Stocks To Watch: Barrick Gold
Once again Barrick Gold Stock (GOLD Stock Report) is testing levels above $28 this week. The last time we saw that was July 9th but it wasn’t able to make a sustained move past $28.05. Currently, the 52-week high still sits at $28.50 from April. Barclays recently upped its price target to $27 and reiterated its equal-weight rating on the stock.
Last week, Barrick reported preliminary Q2 figures. Barrick Gold Corp. estimated it produced 1.15 million ounces of gold and 120 million pounds of copper for the second quarter, a performance that came as the company had to make changes to operations at mines due to the Covid-19 pandemic.The company also anticipates it sold 1.22 million ounces of gold and 123 million pounds of copper during the second quarter ended June 30.
President and chief executive Mark Bristow said these results positioned Barrick well to achieve its guidance for the year, despite the impact of the global Covid-19 pandemic and the resultant lockdowns. Comprehensive programs to counter the spread of Covid-19 are in place at all of Barrick’s operations and it continues to take the necessary steps to manage the impact of the pandemic on its business.
Top Gold Stocks To Watch: Kinross Gold
Considering GDXJ reached a new 52 week high, it might not be a bad idea to have some smaller gold stocks on the list. It’s actually the top holding in VanEck’s Junior Miners ETF with around 6.30% weighting in the fund. Barclays also boosted its target for Kinross Gold stock (KGC Stock Report) from $6 to $7 and maintained an equal-weight rating.
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Last week 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.
The study estimate includes total life of mine production of approximately 4.5 million Au oz.. The average cost of sales is estimated to be $545 per Au oz. and average all-in sustaining cost of sales of $745 per Au oz. That’s during a 15-year mine life, which includes 12 years of mining followed by three years of residual processing. Kinross expressed that the project has “attractive grades and a low estimated strip ratio.”
Top Gold Stocks To Watch: New Gold Inc.
Another one of the smaller gold stocks on the list is New Gold Inc. (NGD Stock Report). Shares didn’t make new 2020 highs. However, NGD did see one of its biggest, single-day moves since the start of the month and continued a 4-day uptrend that began last week.
Last week the company reported preliminary second-quarter results from the Rainy River and New Afton mines. Total production for the second quarter was 98,079 gold equivalent (gold eq.) ounces. This included 64,294 ounces of gold, 134,282 ounces of silver and 16.9 million pounds of copper.
New Gold said that its Rainy River Mine produced 49,633 gold eq. ounces. That broke down to 48,800 ounces of gold and 70,394 ounces of silver) for the quarter. The New Afton Mine produced 48,446 gold eq. ounces. This included 15,494 ounces of gold and 16.9 million pounds of copper for the quarter.
“Over the past number of quarters, the management team has advanced a disciplined approach aimed at repositioning our operations for profitability and free cash flow generation. As our operational performance improved, we have been able to execute on strategic opportunities to restructure our balance sheet and improve our liquidity position as we enter the next phase of our growth strategy.” said Renaud Adams, CEO.