AUMN - Will Gold Reach New Records In 2020?
Gold Prices Expected To Reach New Highs Before Year End According To Analysts
While gold prices have just confirmed what analysts have been anticipating, some like Goldman Sachs expect much greater moves from the precious metal this year and into 2021. The bank forecasts gold prices for the 3, 6, and 12-month outlook to reach $1,800, $1,900, and $2,000 respectively. If that’s the case, in 6 to 12 months, we could see new records set by gold. Now, there’s an obvious caveat to that, which is “this market,” in general.
If you were to tell someone that we would see a 30+% correction following by one of the biggest bounces in market history, who would believe you? Needless to say, that’s what happened this year. However, along the way, this volatility has continued to stem from economic uncertainty on a global scale. Trade talks with China have all but come to a standstill and the IMF just came out with a new outlook today.
The International Monetary Fund cut its economic forecasts again, warning that public finances will deteriorate significantly as governments attempt to combat the fallout from the coronavirus crisis. The IMF now estimates a contraction of 4.9% in global gross domestic product in 2020, lower than the 3% fall it predicted in April.
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“The steep decline in activity comes with a catastrophic hit to the global labor market,” the IMF said Wednesday. The Fund said global decline in work hours in the second quarter of the year is likely to be equivalent to a loss of more than 300 million full-time jobs.
Top Gold Stocks To Watch
This has investors revisiting the idea of safe havens amid continued uncertainty. In light of that, today we saw gold prices reach levels not seen since October of 2012. The price of gold reached a new 2020 high of $1,796.10.
What may be more interesting is that in 2012, the high for the year was $1,797.70. After that, we need to look at historic 2011 levels which happens to be the time frame gold hit its historic $1,923.70 high. So is the writing on the wall for history to be made again? Time will tell but the latest surge has put several gold stocks in the spotlight on Humpday.
New Gold Inc.
Shares of New Gold Inc. (NGD Stock Price) were among the few gold stocks actually holding a green trend during the Wednesday session. While it’s true that the price of gold reached a new high, that came very early on. Once the stock market got into full-swing, a number of gold stocks retreated from the opening bell.
New Gold stock, however still held a gain of around 1.5% from Tuesday’s close. If you recall from a few weeks ago, New Gold announced that it would be pricing a $400 million offering for senior notes. The expected closing date of that financing is actually today. So with that in mind, it will be interesting to see how to market responds.
Comstock Mining Inc.
Another one of the gold stocks upholding gains on Wednesday was Comstock Mining Inc. (LODE Stock Price). Shares of LODE stock jumped to new 2020 highs of $0.8881 during the morning session. Heading into the lunch hour, Comstock Mining stock slid back to around $0.80. While there hasn’t been much news lately, LODE stock managed to climb considerably higher during the end of Q1 and most of Q2. After hitting a low of $0.33 toward the end of March, LODE stock has climbed nearly 170% so far. Besides a stint of insider buying reported on FORM 4s from earlier in June, no further updates have been reported.
Golden Minerals Co.
While some gold stocks may have slid back, other precious metals like silver have helped soften the blow a bit. Golden Minerals Co. (AUMN Stock Price) saw shares climb much higher on Wednesday to highs of $.043. Considering it was trading around $0.31 about 10 days ago, it was a noticeable jump. H.C. Wainwright recently issued a new price target for the mining stock. The firm now holds the stock at a target of $0.80 and maintains a Buy rating.
Under the IMF’s base case, global public debt will reach an all-time high in 2020 and 2021 at 101.5% of GDP and 103.2% of GDP, respectively. The average overall fiscal deficit is set to soar to 13.9% of GDP this year, 10 percentage points higher than in 2019, as well. Given this new set of data, it may not be a bad idea to at least have a list of gold stocks put together in the event safe-haven stocks become a key driver for investors.