Gold stocks extended gains on Wednesday as the price of gold pushed even higher. The bleak outlook for the global economy has a lot to do with that. Key drivers have been “pandemic, economic and political headlines, tariff tiffs, China worries, and relentless buying by [exchange-traded fund] haven seekers,” said George Gero, managing director at RBC Wealth Management to MarketWatch. New COVID cases, now over 3 million in the U.S., have triggered more fear in the stock market today.
As we reported yesterday, ETF demand is seeing more inflows than in recent history. In a report published Tuesday, the Council said that gold ETFs saw the seventh straight month of inflows in June. Gold holdings rose by 104 tons last month. The inflows have pushed gold holdings to new all-time highs of 3,621 tons. The Council also added that assets under management have jumped to their highest level on record.
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“There’s more that we can do, there’s more that we will do, if we need to,” the Fed Vice Chairman, Richard Clarida said on CNN this week.
Loose monetary policy and trillions in stimulus efforts have added fuel to the fire. Last week, Fed Chairman Jerome Powell said, “While this bounce-back in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check.”Top Gold Stocks Reaching New 52-Week Highs In July
With surging gold prices, several gold stocks traded higher. Despite falling back in March, many have mounted a comeback as the price of gold makes historic highs this month.Gold Stocks To Watch: Yamana Gold Stock (NYSE: AUY)
Shares of Yamana Gold Stock (NYSE: AUY) reached a new high of $5.73 this week. This not only marked a new high for 2020 but one for that last 52 weeks. Aside from gold price momentum, this move also comes after recent news. Yamana announced entry into a definitive option agreement.
This would see a privately-held portfolio management and capital markets company acquiring up to 40% interest in a joint venture formed to hold the Suyai Project. It’s an advanced stage gold project located in Chubut Province in Southern Argentina. The management company is based in Argentina and is owned by Eduardo Elsztain and Saúl Zang. The last time Yamana gold stock traded this high was October of 2014.Gold Stocks To Watch: Kinross Gold Stock (NYSE: KGC)
Kinross Gold stock (NYSE: KGC) was another one of the gold stocks we’ve discussed this week. The previous 52-week highs set by KGC came in late-May. Shares reached a high of $7.67 but this week the record was broken. Shares of the gold company hit a high of $7.69 during early trading on July 8th as gold prices reached nearly $1,830/ounce. The last time KGC stock traded this high was in April of 2013. On July 6th, Kinross announced that it plans to release its financial statements and operating results at the end of this month.
These will be for the second quarter of 2020. FOr the first quarter, Kinross reported an adjusted EPS of $0.10 and sales of just under $880 million. EPS beat estimates of $0.08. Furthermore, the company received a favorable response from several analysts. CIBC, for example, upped its price target to $9 following those results. In June, RBC Capital upgraded Kinross to Outperform and boosted its target to $7.50.Gold Stocks To Watch: Harmony Gold Mining (NYSE: HMY)
Similar to Kinross, Harmony gold stock (NYSE: HMY) is another frequently discussed name on our lists of gold stocks. For a 4th consecutive day, HMY stock set a new 52-week high this month. Shares reached a high of $5.55 just as the lunch hour began on July 8th. There hasn’t been any new updates from the company this month.
The company has operations in South Africa and Papua New Guinea. At the end of June the company said that it intends to raise about $200 million to part-finance the company’s Feb. 12 agreement to acquire AngloGold Ashanti’s South African assets.Gold Stocks To Watch: Wheaton Precious Metals (NYSE: WPM)
Gold streaming stock Wheaton Precious Metals (NYSE: WPM) also tested higher highs on Wednesday. Currently, its 52-week high still sits at $47.15. WPM stock recorded an early morning high of $47.11 on July 8th. This is the highest the stock has traded this year since dropping in May. Should Wheaton break above these levels, the next “highest high” sits at the all-time high of $47.60, which shares reached 1 time in 2011.
This week the company announced that it will release its 2020 second-quarter results on Wednesday, August 12, 2020, after market close. This follows that last major update from the company in late-June. Wheaton reported that its wholly-owned subsidiary, Wheaton Precious Metals International Ltd. signed a non-binding term sheet with Caldas Gold Corp. (TSXV:CGC). The companies plan to enter into a Precious Metals Purchase Agreement for the Marmato Project located in Colombia.Are Gold & Gold Stocks Set For New Highs?
Despite the short-term volatility, gold has remained in a bullish stance for most of the year. March obviously saw a broad-market pullback. But ever since then, things have been moving aggressively higher. Since March lows, the price of gold ETFs like GLD, GDX, and GDXJ have bounced by as much as 25.5%, 142%, and 176% respectively. That may suggest junior gold stocks are outperforming during times where the gold sector is shining.
“It’s logical to expect gold to outperform most assets in an environment of unparalleled central-bank easing, and we foresee the precious metal maintaining the upper hand in most scenarios. There’s little to stop the gold-up, copper-down trajectories, in place well before the coronavirus struck,” wrote Bloomberg Intelligence senior commodity strategist Mike McGlone. “Depression-like global conditions should press the BCOM below the 2016 trough and gold above its all-time high, about $1,900 an ounce.”