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Ride the Gold Bull Market with These Mining Stocks
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Gold is enjoying a solid run of late, thanks largely to a strong tailwind from Britain’s recent market-jolting decision to quit the European Union (EU). The yellow metal’s healthy momentum is exhibited by a roughly 24% surge in its value since the beginning of this year.
Bullion’s Bull Run
Gold prices zoomed as much as around 8% to their highest level in two years (crossing the $1,300 per troy ounce threshold) last Friday after Britain voted to leave the EU, sending global stock markets into a tailspin.
Results from the historic EU referendum, which saw the ‘Leave’ side winning 52% of the vote, triggered safe-haven buying as investors panicked that ‘Brexit’ would bring political and financial instability to Europe and could cause severe damage to the global economy. Gold prices also settled higher for the second day in a row on Monday.
The Brexit-induced bullion rally has stoked bullishness in the gold market. The intense market uncertainty brought forth by Brexit is expected to continue to fuel investors’ appetite for safe-haven assets, particularly gold.
The ongoing uncertainty is expected to continue to spur demand for gold in the coming days, thereby supporting the metal’s prices. Gold, under normal circumstances, gains from negative vibes in the economy and is considered a safe-haven amid economic and geopolitical tensions.
Gold is also finding support from the U.S. Federal Reserve’s dovish stance. The Fed, earlier this month, left benchmark interest rates steady in the band of 0.25%-0.50% citing a sharp drop in U.S. hiring in May that raised doubts about the strength of the labor market as well as the health of the U.S. economy. The central bank gave no clues on timing of the next hike and indicated that it needs a clearer economic picture before increasing rates again.
A delay in raising interest rates elevates demand for gold, which produces no income but relies on price appreciation to lure investors. On the other hand, a hike in interest rates tends to boost returns from income generating assets and thus hits non-yielding commodities, including gold. A low interest rate environment bodes well for gold.
Other factors that also contributed to yellow metal’s rebound this year include volatility in equities, a weaker greenback, slowdown in China and introduction of negative interest rates by several of the world’s central banks that have fueled safe-haven demand for gold.
In fact, gold had been the best performing asset in first-quarter 2016, outshining major equity indices, investment grade and high yield bonds and commodity indices. The spike in gold prices has also led to a surge in the share prices of many gold miners this year.
Moving ahead, gold prices should also get support from retail demand in the latter part of 2016, which is seasonally strong for top consumers like India and China. Moreover, pent-up demand due to the prolonged shutdown of jewelry stores in India is expected to act as a catalyst. A good monsoon season in India is also expected to boost consumer sentiment and support gold demand.
6 Shining Gold Stocks to Buy
As the conditions for bullion’s recent gains remain in place, it would be a good idea to add some top-quality gold mining stocks to your portfolio that are well-placed to leverage the recent upward momentum in the gold market and have solid growth prospects. Our selection is backed by a good Zacks Rank.
Vancouver, Canada-based B2Gold explores and develops mineral properties in Nicaragua, the Philippines, Namibia, Burkina Faso and Chile. The company primarily explores for gold, silver and copper.
The stock holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of a whopping 700% for the current year. B2Gold has also seen its shares soar around 146% year to date.
Goldcorp Inc.
Vancouver-based Goldcorp is a leading gold producer engaged in gold mining and related activities across Canada, the U.S., Mexico and Central and South America.
The company sports a Zacks Rank #2 (Buy) and has expected earnings growth of around 354% for the current year. Moreover, the stock has gained roughly 60% so far this year.
Toronto-based IAMGOLD is engaged in the exploration, development and operation of gold mining properties. It also explores for copper and silver. The company holds interests in four operating gold mines, as well as exploration and development projects located in Africa, South America and Canada.
This Zacks Rank #2 stock has expected earnings growth of around 66% for the current year. Moreover, the stock has gained roughly 208% year to date.
South Africa-based Harmony conducts underground and surface gold mining and is also engaged in related activities such as exploration, processing, smelting and refining.
The stock holds a Zacks Rank #2 and has expected earnings growth of 225% for the current year. Harmony has seen its shares surge roughly 274% year to date.
Vancouver-based Sandstorm Gold concentrates on completing gold purchase agreements with gold mining companies that have advanced stage development projects or operating mines.
Sandstorm Gold carries a Zacks Rank #2 and has expected earnings growth of around 115% for the current year. The stock has also gained 83% year to date.
Pershing Gold Corporation
Lakewood, CO-based Pershing Gold engages in the exploration and mining of gold and precious metal properties mainly in Nevada. It focuses on the exploration of Relief Canyon properties covering an area of around 25,000 acres based in Pershing County in north western Nevada.
The company sports a Zacks Rank #2 and has expected earnings growth of around 49% for the current year. The stock has gained roughly 20% so far this year.
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Ride the Gold Bull Market with These Mining Stocks
Gold is enjoying a solid run of late, thanks largely to a strong tailwind from Britain’s recent market-jolting decision to quit the European Union (EU). The yellow metal’s healthy momentum is exhibited by a roughly 24% surge in its value since the beginning of this year.
Bullion’s Bull Run
Gold prices zoomed as much as around 8% to their highest level in two years (crossing the $1,300 per troy ounce threshold) last Friday after Britain voted to leave the EU, sending global stock markets into a tailspin.
Results from the historic EU referendum, which saw the ‘Leave’ side winning 52% of the vote, triggered safe-haven buying as investors panicked that ‘Brexit’ would bring political and financial instability to Europe and could cause severe damage to the global economy. Gold prices also settled higher for the second day in a row on Monday.
The Brexit-induced bullion rally has stoked bullishness in the gold market. The intense market uncertainty brought forth by Brexit is expected to continue to fuel investors’ appetite for safe-haven assets, particularly gold.
The ongoing uncertainty is expected to continue to spur demand for gold in the coming days, thereby supporting the metal’s prices. Gold, under normal circumstances, gains from negative vibes in the economy and is considered a safe-haven amid economic and geopolitical tensions.
Gold is also finding support from the U.S. Federal Reserve’s dovish stance. The Fed, earlier this month, left benchmark interest rates steady in the band of 0.25%-0.50% citing a sharp drop in U.S. hiring in May that raised doubts about the strength of the labor market as well as the health of the U.S. economy. The central bank gave no clues on timing of the next hike and indicated that it needs a clearer economic picture before increasing rates again.
A delay in raising interest rates elevates demand for gold, which produces no income but relies on price appreciation to lure investors. On the other hand, a hike in interest rates tends to boost returns from income generating assets and thus hits non-yielding commodities, including gold. A low interest rate environment bodes well for gold.
Other factors that also contributed to yellow metal’s rebound this year include volatility in equities, a weaker greenback, slowdown in China and introduction of negative interest rates by several of the world’s central banks that have fueled safe-haven demand for gold.
In fact, gold had been the best performing asset in first-quarter 2016, outshining major equity indices, investment grade and high yield bonds and commodity indices. The spike in gold prices has also led to a surge in the share prices of many gold miners this year.
Moving ahead, gold prices should also get support from retail demand in the latter part of 2016, which is seasonally strong for top consumers like India and China. Moreover, pent-up demand due to the prolonged shutdown of jewelry stores in India is expected to act as a catalyst. A good monsoon season in India is also expected to boost consumer sentiment and support gold demand.
6 Shining Gold Stocks to Buy
As the conditions for bullion’s recent gains remain in place, it would be a good idea to add some top-quality gold mining stocks to your portfolio that are well-placed to leverage the recent upward momentum in the gold market and have solid growth prospects. Our selection is backed by a good Zacks Rank.
B2Gold Corp. (BTG - Free Report)
Vancouver, Canada-based B2Gold explores and develops mineral properties in Nicaragua, the Philippines, Namibia, Burkina Faso and Chile. The company primarily explores for gold, silver and copper.
The stock holds a Zacks Rank #1 (Strong Buy) and has expected earnings growth of a whopping 700% for the current year. B2Gold has also seen its shares soar around 146% year to date.
Goldcorp Inc.
Vancouver-based Goldcorp is a leading gold producer engaged in gold mining and related activities across Canada, the U.S., Mexico and Central and South America.
The company sports a Zacks Rank #2 (Buy) and has expected earnings growth of around 354% for the current year. Moreover, the stock has gained roughly 60% so far this year.
IAMGOLD Corp. (IAG - Free Report)
Toronto-based IAMGOLD is engaged in the exploration, development and operation of gold mining properties. It also explores for copper and silver. The company holds interests in four operating gold mines, as well as exploration and development projects located in Africa, South America and Canada.
This Zacks Rank #2 stock has expected earnings growth of around 66% for the current year. Moreover, the stock has gained roughly 208% year to date.
Harmony Gold Mining Company Ltd. (HMY - Free Report)
South Africa-based Harmony conducts underground and surface gold mining and is also engaged in related activities such as exploration, processing, smelting and refining.
The stock holds a Zacks Rank #2 and has expected earnings growth of 225% for the current year. Harmony has seen its shares surge roughly 274% year to date.
Sandstorm Gold Ltd. (SAND - Free Report)
Vancouver-based Sandstorm Gold concentrates on completing gold purchase agreements with gold mining companies that have advanced stage development projects or operating mines.
Sandstorm Gold carries a Zacks Rank #2 and has expected earnings growth of around 115% for the current year. The stock has also gained 83% year to date.
Pershing Gold Corporation
Lakewood, CO-based Pershing Gold engages in the exploration and mining of gold and precious metal properties mainly in Nevada. It focuses on the exploration of Relief Canyon properties covering an area of around 25,000 acres based in Pershing County in north western Nevada.
The company sports a Zacks Rank #2 and has expected earnings growth of around 49% for the current year. The stock has gained roughly 20% so far this year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>