Should You Buy Barrick Gold Stock?
The stock market took a turn for the worse on Friday as impeachment proceedings continued in the U.S. The United States President, Donald Trump, has been the center of a firestorm of questions stemming from his unorthodox leadership style. This resulted in broader markets getting hit hard. Both the S&P ETF (SPY – Free Report) & NASDAQ ETF (QQQ – Free Report) fell over 1% each on Friday. This also leads investors to seek out safe havens.
The Credit Suisse Velocity or TVIX measures volatility in the market and had an incredible day on Friday. But what shined even brighter? Gold stocks. The VanEck Junior Gold Miners ETF (GDXJ – Free Report) soared 2% from its previous close to highs of over $41.70.
The SPDR Gold Shares ETF (GLD – Free Report) shot up over 0.70%. In addition, the VanEck Vectors Gold Miners ETF (GDX – Free Report) was up 2% as well. Safe-haven stocks are surging and that trend could be something to watch closely over the weekend.
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Saturday we will see the President’s defense speak out. The House brought charges of obstruction-of-Congress against the President in the 3rd and final day of deliberation on their side. The initial focus for the former was with regard to the president’s conduct toward Ukraine. It also pushed the narrative of Trump’s withholding of military aid and pressure to investigate Joe Biden and his son Hunter.
A Bullish Case For Barrick Gold Stock?
Barrick Gold (GOLD – Free Report) (ABX) has become one of the most well-known global gold mining companies across the world. The company has operations in 15 countries as it stands today.
It also has numerous strategic deals in place with large and smaller miners. One of the biggest questions that have weighed recently was Barrick’s progress in Tanzania.
This week the company announced that it has made significant headway in reshaping its operations in the country. A formal joint venture has been inked between Barrick and the United Republic of Tanzania to secure this project. It will see the creation of Twiga Minerals Corporation. Twiga will act as the jointly owned management company overseeing local operations.
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What’s more, is that Barrick will now establish an education hub for the mining industry in the region. The company will commit up to $10 million in funding to its partner, the University of Dar es Salaam, to train and develop skills for a 10-year period. There’s also a $40 million commitment to upgrade infrastructure including roadways.
Barrick Gold Finishing 2019 Strong
Investors looking at Barrick Gold stock right now are doing so just after the company reported its 2019 production results. In particular, gold production came in at 5.5 million ounces. Based on the fact that guidance was 51.-5.6 million ounces, Barrick delivered toward the higher end of its guidance range. Furthermore, preliminary copper production came in at 432 million pounds, which exceeded guidance altogether.
Specifically for the 4th quarter, gold ounces totaled 1.439 million ounces and copper came in at 117 million pounds. In a few weeks, the company will formally report its quarterly and full-year results on February 12.
This has helped boost momentum for GOLD recently. After beginning the year around $19USD a share, Barrick shares pulled back to lows of $17.26 on the 14th. Since then, however, it has been nothing but moves higher. If you remember last year, Barrick ended up sinking to lows of $11.65 at the end of May along with many other gold stocks. Since then, it has managed to climb much higher. While there’s a technical trend to consider here, the bigger picture may be on a few things:
- The U.S. Presidential Impeachment process
- Mounting government debt
- Certain subsidies coming to an end this year
- The IMF’s statements of slower, global economic growth
- The likelihood of fewer corporate buybacks that would otherwise help boost markets as they did during previous years
There are many more potential risks to consider. However, as much as there may be a technical “play” in gold, the fundamentals can’t be ignored.