Gold at 8-Year High: Grab These 4 Gold Mining Stocks
Spot gold rose 0.8% and closed on June 22 at $ 1,755.61 - the highest closing price since 2012. Gold futures for delivery in August rose 0.8% to $ 1,766.40 an ounce after hit a high of $ 1,779 an ounce. This upswing is due to massive inflows into gold-backed ETFs in the United States. Expectations of a second wave of coronavirus infections and stimulus measures also support the gold price.
According to the World Gold Council, there was a massive inflow of 27.3 tons (974,000 ounces) of gold ETFs on June 19. SPDR gold stocks - the largest physically secured exchange-traded gold fund - recorded a large part of the inflows at 23.1 tonnes or 742,492 ounces as the June contract for options expired. Total inflows since the beginning of the month have been 55.6 tons (1.96 million ounces), with the majority coming from North America. From January to May, global gold ETFs had record inflows of 623 tons, surpassing the previous high of 591 tons in 2009.
Gold is on the rise this year
Gold has risen 15.5% so far this year. Everything seems to be working in favor of gold in 2020, starting with US-Iran tensions, the coronavirus pandemic, US-China tensions, and US unrest.
Due to the gold price rally, the gold mining industry has risen 22.5% since the beginning of the year, while the S & P 500 declined by 3.1%. The industry falls under the broader raw materials sector, which fell by 9.4%.
As governments begin to loosen restrictions and reopen their economies, concerns have been raised about an increase in coronavirus cases. With the pandemic showing no signs of soon dying, uncertainty about the impact on the global economy will continue to trigger gold demand in safe havens. The gold bullet also received a boost from stimulus measures, including the Bank of England's expansion of its bond purchase program, and the Federal Reserve's signaling rates will remain low.
The pandemic affected gold production as miners were forced to stop operating in accordance with government mandates. According to the World Gold Council, gold production declined 3% year over year in the first quarter - the sharpest decline since the first quarter of 2017. An impending imbalance between supply and demand is therefore a good sign of the gold price.
The gold mining industry currently ranks 72nd in the zacks industry, ranking among the top 28% of the 256 zacks industries. Our research shows that the top 50% of the Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.
With the Zacks Screener, we have selected promising gold stocks that have a combination of a VGM score of A or B and a Zacks rank of 1 (strong buy) or 2 (buy) and offer solid investment opportunities. The full list of today's Zacks # 1 Rank stocks can be found here.
4 promising gold miners
AngloGold Ashanti Limited AU: The company, based in Johannesburg, South Africa, currently has a Zacks rank 2 and a VGM value of A. The company has a long-term estimated earnings growth rate of 21.9%. The Zacks Consensus estimate for the 2020 result shows an improvement of 109.9% over the previous year. The estimate has been revised up 4% over the past 60 days.
Barrick Gold Corporation GOLD: The Toronto, Canada-based company currently has a Zacks rank 2 and a VGM value of B. The Zacks consensus estimate for the results for the current year assumes growth of 55% over the previous year. The estimate has moved 10% north over the past 90 days. After four quarters, the company recorded a positive earnings surprise of 15.4% on average. The stock has a long-term expected growth rate of 2%.
Harmony Gold Mining Company Limited HMY: This company, based in Randfontein, South Africa, currently has a Zacks rank of 2 and a VGM value of A. The Zacks consensus estimate for the result for the current year indicates an improvement of 28.6% the previous year. The stock has a long-term expected earnings growth rate of 45.8%.
GAU by Galiano Gold Inc .: The company was formerly known as Asanko Gold Inc. and was renamed Galiano Gold Inc. in May 2020. The company, headquartered in Vancouver, Canada, currently has a Zacks rank 1 and a VGM value of A. The Zacks consensus estimate for the result for the current year shows a growth of 1100% compared to the previous year. After four quarters, the company recorded a positive earnings surprise of 75% on average. The stock has a long-term expected growth rate of 2%.
These stocks are on the verge of a pandemic
The COVID 19 outbreak has changed consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America going. Investors in these companies currently have a shot at serious profits. For example, Zoom rose 108.5% in less than 4 months while most other stocks declined.
Our research shows that 5 state-of-the-art stocks could skyrocket due to the exponential growth in demand for Stay at Home technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Take a look at the 5 high-tech stocks now >>
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Barrick Gold Corporation (GOLD): Free stock analysis report
AngloGold Ashanti Limited (AU): Free stock analysis report
Harmony Gold Mining Company Limited (HMY): Free stock analysis report
Asanko Gold Inc. (GAU): Free stock analysis report
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