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3 Gold Mining Stocks to Buy as Interest Rates Look to Subside
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Gold has made a solid comeback on Wall Street recently. Through the third quarter, 157 metric tons of gold worth $10 billion was scooped up by market participants, 56% more than the year-ago quarter.
In recent weeks, coinciding with the fall of treasury yields from their October peaks, the price of gold has been hitting all-time highs. On Monday, Dec 4, spot gold briefly hit $2,135.39/ounce, an all-time high, before settling back down to $2027 midday. The day before, gold futures had hit an intra-day high of $2152.30 before sliding 2% to close the session.
Geopolitical turmoils historically have had a positive effect on the gold sector. As the war rages between Israel and Hamas, and other parties such as Hezbollah in Lebanon and Houthi rebels in Yemen become more involved in the conflict, the possibility of the war lingering on increases. Also, it is worth remembering that the Russia-Ukraine conflict has never de-escalated, even as the focus has shifted to the Middle East. Investors usually add gold to their portfolios during times of geopolitical turmoil, especially military conflicts.
However, the biggest impact behind the rise of gold has been falling dollar prices and market participants expecting lower interest rates from the Fed. Currently, investors believe that the central bank has already come to the end of its rate-hike cycle and will be lowering rates as early as the first quarter of 2024. This would entail a rise in stock prices and a fall in bond yields. In a volatile market, when bond yields fall, gold prices pick up as people rush to the safe haven of the precious yellow metal. So, it would be prudent to buy gold mining stocks at this juncture, in what seems to be the early stages of a bull market for the metal.
Comstock Inc. (LODE - Free Report) is a decarbonization and mining company that mines, among various other metals, gold.
Comstock’s expected earnings growth rate for the current year is 93.5%. The Zacks Consensus Estimate for its current-year earnings has improved 78.6% over the past 60 days. Comstock currently sports a Zacks Rank #1.
Alamos Gold Inc. (AGI - Free Report) is a company engaged in the exploration, development and extraction of precious metals in Canada and Mexico, primarily focused on gold and silver.
Alamos’ expected earnings growth rate for the current year is 89.3%. The Zacks Consensus Estimate for its current-year earnings has improved 23.3% over the past 60 days. Alamos currently carries a Zacks Rank #2.
Galiano Gold Inc. (GAU - Free Report) is an explorer, developer and producer of gold properties.
Galiano’s expected earnings growth rate for the current year is 500%. The Zacks Consensus Estimate for its current-year earnings has improved 12.5% over the past 60 days. Galiano currently has a Zacks Rank #2.
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3 Gold Mining Stocks to Buy as Interest Rates Look to Subside
Gold has made a solid comeback on Wall Street recently. Through the third quarter, 157 metric tons of gold worth $10 billion was scooped up by market participants, 56% more than the year-ago quarter.
In recent weeks, coinciding with the fall of treasury yields from their October peaks, the price of gold has been hitting all-time highs. On Monday, Dec 4, spot gold briefly hit $2,135.39/ounce, an all-time high, before settling back down to $2027 midday. The day before, gold futures had hit an intra-day high of $2152.30 before sliding 2% to close the session.
Geopolitical turmoils historically have had a positive effect on the gold sector. As the war rages between Israel and Hamas, and other parties such as Hezbollah in Lebanon and Houthi rebels in Yemen become more involved in the conflict, the possibility of the war lingering on increases. Also, it is worth remembering that the Russia-Ukraine conflict has never de-escalated, even as the focus has shifted to the Middle East. Investors usually add gold to their portfolios during times of geopolitical turmoil, especially military conflicts.
However, the biggest impact behind the rise of gold has been falling dollar prices and market participants expecting lower interest rates from the Fed. Currently, investors believe that the central bank has already come to the end of its rate-hike cycle and will be lowering rates as early as the first quarter of 2024. This would entail a rise in stock prices and a fall in bond yields. In a volatile market, when bond yields fall, gold prices pick up as people rush to the safe haven of the precious yellow metal. So, it would be prudent to buy gold mining stocks at this juncture, in what seems to be the early stages of a bull market for the metal.
Our Choices
The stocks below flaunt a Zacks Rank #1 (Strong Buy) or Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comstock Inc. (LODE - Free Report) is a decarbonization and mining company that mines, among various other metals, gold.
Comstock’s expected earnings growth rate for the current year is 93.5%. The Zacks Consensus Estimate for its current-year earnings has improved 78.6% over the past 60 days. Comstock currently sports a Zacks Rank #1.
Alamos Gold Inc. (AGI - Free Report) is a company engaged in the exploration, development and extraction of precious metals in Canada and Mexico, primarily focused on gold and silver.
Alamos’ expected earnings growth rate for the current year is 89.3%. The Zacks Consensus Estimate for its current-year earnings has improved 23.3% over the past 60 days. Alamos currently carries a Zacks Rank #2.
Galiano Gold Inc. (GAU - Free Report) is an explorer, developer and producer of gold properties.
Galiano’s expected earnings growth rate for the current year is 500%. The Zacks Consensus Estimate for its current-year earnings has improved 12.5% over the past 60 days. Galiano currently has a Zacks Rank #2.