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Forget the Gold Slump, These Gold Stocks Are Good Buys
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Gold prices fell 0.6% yesterday to $1,337.22 on the release of minutes from the U.S. Fed’s July meeting, which showed Fed officials expected an interest rate hike soon but were still awaiting more data. Given that chances of a rate hike later this year have increased, this has dealt a blow to safe-haven assets such as gold.
Earlier on Tuesday, New York Fed President William Dudley had said the Federal Reserve could, in all probability, raise interest in September. Atlanta Fed President Dennis Lockhart also pitched in with his opinion by saying that the U.S. economy was probably strong enough to withstand at least one rate hike this year, even with two being a possibility.
As per the minutes, while the members were generally upbeat about the U.S. economy and labor market, several opine any slowdown in jobs would work against a near-term hike. The Dow Jones Industrial Average rose 21.92 points (0.12%) to 18573.94 while the S&P 500 gained 4.07 points (0.19%) to 2182.22. The Nasdaq Composite rose 1.55 points or 0.03% to 5228.66. All three indexes are currently near records as ultra-low rates and central banks’ quantitative easing of policies have suppressed returns on bonds, making stocks look attractive in comparison.
Earlier this month, an encouraging July job report raised chances of a Fed rate hike in September, led to a drop in gold prices. Notwithstanding the recent slides, gold has surged 26% so far this year. The chances of an upside for gold remains, since a variety of risks continues to hover on the horizon. Britain’s historic decision to leave the EU is working in favor of gold. Further, the path for U.S. rate hikes is still unclear.
Gold prices are generally helped by retail demand in countries like India and China, with the wedding and festival seasons occurring in the second half of the year. India will be a major driver with pent up demand having intensified due to the shutdown of jewelry stores earlier in the year. A good monsoon also bodes well for gold.
Another factor that will eventually be a tailwind for gold is the supply of the precious metal having already attained peak levels as per reports. Global production of gold is likely to decline by 3% in 2016, thus ending a 7-year stint of rising output. Lower mined outputs forming the gold supply could help prices move north.
Thus, prospects for gold miners continue to remain bright. We have thus highlighted a few gold stocks that are good buys right now, and backed by a strong Zacks Rank and upward estimate revisions.
Headquartered in Johannesburg, South Africa, AngloGold Ashanti Limited operates as a gold mining and exploration company.
AngloGold Ashanti has a Zacks Rank #1 (Strong Buy) and its stock has surged 183.94% year to date. The company has a long term expected earnings growth of 27.65%.
The company’s fiscal 2016 estimates have moved north over the last 30 days. The Zacks Consensus Estimate for fiscal 2016 is at $1.13, which is expected to skyrocket 352% year over year.
B2Gold Corp.explores and develops mineral properties in Nicaragua, the Philippines, Namibia, Burkina Faso and Chile. The company primarily explores for gold, silver and copper.
B2Gold sports a Zacks Rank #1 and its share price has surged 223.53% year to date. The company’s fiscal 2016 estimates have moved north over the last 30 days. Fiscal 2016 earnings is currently pegged at 11 cents, a substantial improvement from 1 cent earned in the prior fiscal.
Randgold Resources Limited explores for gold deposits and develops gold deposits in Sub-Saharan Africa.
Randgold Resources carries a Zacks Rank #1. It share price has gained79.41% year to date and the company has a long term expected earnings growth of 5%.
The company’s fiscal 2016 estimates have been revised upward over the last 30 days. Fiscal 2016 earnings is currently at $3.22, reflecting a 60% year over year growth.
Based in Denver, CO, Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metals royalties, metal streams, and similar interests.
Royal Gold carries a Zacks Rank #1 and its share price has gained 128.38% year to date. The company has a long term expected earnings growth of 25.1%.
The company’s fiscal 2016 estimates have moved up over the last 30 days and is currently at $1.80. This reflects a 79.86% year over year growth.
Sibanye Gold Ltd.
Sibanye Gold Limited, Based in Westonaria, South Africa, owns and operates underground and surface gold operations in South Africa.
Sibanye Gold carries a Zacks Rank #1 and its share price has surged 234.15% year to date.
The company’s fiscal 2016 estimates have moved up over the last 30 days and is currently at $2.50. This reflects a stellar improvement from 23 cents reported in the prior fiscal.
New Gold , Vancouver, Canada-based, is engaged in the acquisition, exploration, development, and operation of mineral properties. It primarily explores for gold, silver and copper deposits.
New Gold carries a Zacks Rank #1 and its share price has surged 148.28% year to date. Estimates for 2016 have moved up over the last 30 days and is currently at 7 cents. This a major improvement considering that the company had posted a loss of 2 cents per share in fiscal 2015.
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Forget the Gold Slump, These Gold Stocks Are Good Buys
Gold prices fell 0.6% yesterday to $1,337.22 on the release of minutes from the U.S. Fed’s July meeting, which showed Fed officials expected an interest rate hike soon but were still awaiting more data. Given that chances of a rate hike later this year have increased, this has dealt a blow to safe-haven assets such as gold.
Earlier on Tuesday, New York Fed President William Dudley had said the Federal Reserve could, in all probability, raise interest in September. Atlanta Fed President Dennis Lockhart also pitched in with his opinion by saying that the U.S. economy was probably strong enough to withstand at least one rate hike this year, even with two being a possibility.
As per the minutes, while the members were generally upbeat about the U.S. economy and labor market, several opine any slowdown in jobs would work against a near-term hike. The Dow Jones Industrial Average rose 21.92 points (0.12%) to 18573.94 while the S&P 500 gained 4.07 points (0.19%) to 2182.22. The Nasdaq Composite rose 1.55 points or 0.03% to 5228.66. All three indexes are currently near records as ultra-low rates and central banks’ quantitative easing of policies have suppressed returns on bonds, making stocks look attractive in comparison.
Earlier this month, an encouraging July job report raised chances of a Fed rate hike in September, led to a drop in gold prices. Notwithstanding the recent slides, gold has surged 26% so far this year. The chances of an upside for gold remains, since a variety of risks continues to hover on the horizon. Britain’s historic decision to leave the EU is working in favor of gold. Further, the path for U.S. rate hikes is still unclear.
Gold prices are generally helped by retail demand in countries like India and China, with the wedding and festival seasons occurring in the second half of the year. India will be a major driver with pent up demand having intensified due to the shutdown of jewelry stores earlier in the year. A good monsoon also bodes well for gold.
Another factor that will eventually be a tailwind for gold is the supply of the precious metal having already attained peak levels as per reports. Global production of gold is likely to decline by 3% in 2016, thus ending a 7-year stint of rising output. Lower mined outputs forming the gold supply could help prices move north.
MINING-GOLD Industry Price Index
MINING-GOLD Industry Price Index
Thus, prospects for gold miners continue to remain bright. We have thus highlighted a few gold stocks that are good buys right now, and backed by a strong Zacks Rank and upward estimate revisions.
AngloGold Ashanti Ltd. (AU - Free Report)
Headquartered in Johannesburg, South Africa, AngloGold Ashanti Limited operates as a gold mining and exploration company.
AngloGold Ashanti has a Zacks Rank #1 (Strong Buy) and its stock has surged 183.94% year to date. The company has a long term expected earnings growth of 27.65%.
The company’s fiscal 2016 estimates have moved north over the last 30 days. The Zacks Consensus Estimate for fiscal 2016 is at $1.13, which is expected to skyrocket 352% year over year.
B2Gold Corp. (BTG - Free Report)
B2Gold Corp.explores and develops mineral properties in Nicaragua, the Philippines, Namibia, Burkina Faso and Chile. The company primarily explores for gold, silver and copper.
B2Gold sports a Zacks Rank #1 and its share price has surged 223.53% year to date. The company’s fiscal 2016 estimates have moved north over the last 30 days. Fiscal 2016 earnings is currently pegged at 11 cents, a substantial improvement from 1 cent earned in the prior fiscal.
Randgold Resources Ltd. (GOLD - Free Report)
Randgold Resources Limited explores for gold deposits and develops gold deposits in Sub-Saharan Africa.
Randgold Resources carries a Zacks Rank #1. It share price has gained79.41% year to date and the company has a long term expected earnings growth of 5%.
The company’s fiscal 2016 estimates have been revised upward over the last 30 days. Fiscal 2016 earnings is currently at $3.22, reflecting a 60% year over year growth.
Royal Gold, Inc. (RGLD - Free Report)
Based in Denver, CO, Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metals royalties, metal streams, and similar interests.
Royal Gold carries a Zacks Rank #1 and its share price has gained 128.38% year to date. The company has a long term expected earnings growth of 25.1%.
The company’s fiscal 2016 estimates have moved up over the last 30 days and is currently at $1.80. This reflects a 79.86% year over year growth.
Sibanye Gold Ltd.
Sibanye Gold Limited, Based in Westonaria, South Africa, owns and operates underground and surface gold operations in South Africa.
Sibanye Gold carries a Zacks Rank #1 and its share price has surged 234.15% year to date.
The company’s fiscal 2016 estimates have moved up over the last 30 days and is currently at $2.50. This reflects a stellar improvement from 23 cents reported in the prior fiscal.
New Gold, Inc. (NGD - Free Report)
New Gold , Vancouver, Canada-based, is engaged in the acquisition, exploration, development, and operation of mineral properties. It primarily explores for gold, silver and copper deposits.
New Gold carries a Zacks Rank #1 and its share price has surged 148.28% year to date. Estimates for 2016 have moved up over the last 30 days and is currently at 7 cents. This a major improvement considering that the company had posted a loss of 2 cents per share in fiscal 2015.
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 >>