KGC - Will The Price Of Gold Boost Gold Stocks Right Now?
Gold Stocks To Watch As The Price Of Gold Consolidates
If you’re looking at the stock market today, headlines likely play a big role in how your trade. One of the most popular ways to find certain gold stocks to buy has been watching technical trends. Over the last few weeks, since hitting 2020 highs, the price of gold has consolidated.
This shouldn’t be confused with bearish trading. During times of a general uptrend, consolidation can be a sign that the market is digesting information and positioning for the next move. While profit-taking is part of this trend, equal buying is a reason why the selling pressure doesn’t cause a stock or commodity’s price from falling apart.
The bottom line: tentative price action in gold over the past few sessions suggests investors are torn between optimism and caution. Obviously, the optimism is over the gradual re-opening of the global economy. The caution comes from very negative economic data.
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Gold traders are also zeroing in on reports of new coronavirus cases around the world. This is potentially bullish because a new wave of cases would be devastating to the global economy, forcing more fiscal and monetary policy stimulus into the financial markets, which would weaken domestic currencies, while making gold a more desirable asset.
Gold Stocks To Watch
While the market remains torn, gold stocks continue to trade closely with the trend in the price of gold. Given the continued stimulus measures, the data continues to suggest a continued pace for bullish gold. Meanwhile, global trends for coronavirus remain uncertain.
In Germany, for instance, the Robert Koch Institute reported that the “reproduction rate” had risen to 1.1. This refers to the number of people each person infected with the coronavirus goes on to infect. Apparently, any rate above 1 means the virus is spreading exponentially.
Furthermore, we’re getting new economic data results this week. Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index fell 0.8% in April, after a 0.4% drop in March. The data weaker than expected with consensus forecasts calling for a drop of 0.7%. For the year, headline inflation increased by 0.3%, according to the report.
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Leading the decline in inflation was a 20% drop in the gasoline index last month. April saw a rough month for oil market. If you remember, it saw prices fall into negative territory for the first time in history. All of this could push the narrative in favor of gold and gold stocks right now.
Barrick Gold Stock Bounces Back
Shares of Barrick gold stock (GOLD Stock report) have bounced back after Monday’s market rout. After a strong week last week, GOLD stock dropped from Friday’s close of $27.39 to lows of $25.91 on Monday.
Starting on Tuesday, it would appear that GOLD stock is starting to make its way back up now breaking above $26.50 heading into the lunch hour. There’ve been no new updates from Barrick so for this gold stock, it would appear that the price of gold is “driving” the market right now.
IAMGOLD Stock Remains Bullish In May
Unlike Barrick gold stock, IAMGOLD (IAG Stock Report) has upheld its bullishness. There was some pull-back on Monday. However, in comparison to the drop realized in shares of GOLD, IAG traded in more of a sideways trend than anything at all. Since March 16, IAG stock has rebounded by as much as 162.5% and remains at trading levels near its Q2 high.
Earlier this month, IAMGOLD filed a preliminary short form base shelf prospectus with the securities regulators in each province and territory of Canada. This filing replaces the previous shelf, which expired on May 3, 2020. The shelf registration will allow the company to raise up to US $1 billion during the next 25 months in the United States and Canada. So, while the price of gold continues to ebb, those watching IAG stock right now may want to keep this in mind.
Kinross Gold Stock Nears 2020 High Once Again
Shares of Kinross Gold stock (KGC Stock Report) mimicked a similar trend as IAG has. While KGC stock pulled back slightly on Monday, it wasn’t near the level that Barrick gold stock saw. In light of this, Kinross gold stock has upheld a sideways trend seen over the last few weeks since hitting 2020 highs of $7.25. On Tuesday, the market saw shares reach early morning highs of $7.19 so far.
Analysts have monitored progress closely with the company and how it has addressed operational constraints during the coronavirus pandemic. In light of this, firms like CIBC have maintained high ratings for the company. In particular, CIBC holds an Outperform rating on Kinross gold stock and just boosted its price target to $9.