The reason, historically, that gold and gold stocks begin to go higher is fear.
If there’s enough fear in world markets, it’s the precious metal that tends to find buyers. It might be fear of renewed inflation, or it might be fear of disinflation. That Vladimir Putin keeps bringing up the subject of nukes might be a reason.
Whatever it is, the price of gold and gold stocks slowly but surely continues to gain in value. From selloffs that seem to have bottomed in the September/October/November time frame, buyers have steadily returned and now, in January, 6-month highs are in place.
Each one of these 4 major gold miners is a component of the VanEck Vectors Gold Miners ETF, a benchmark for the sector:
Agnico Eagle Mines Ltd (NYSE: AEM) has corporate headquarters in Toronto, Ontario, Canada and operates mines in that country as well as in Australia, Finland and Mexico. The company has “exploration and development” projects in the United States and Columbia. With a price-earnings ratio of 37 and trading at 1.57 times book, Agnico Eagle pays a 2.89% dividend. Market capitalization for the mining company sits at $25.2 billion.
The crossover of the 50-day moving average (the blue line) above the 200-day moving average (the red line) is a positive for the stock. The relative strength indicator (RSI, below the price chart) shows a positive divergence from the late-July low to the late-September lower low.
Barrick Gold Corp (NYSE: GOLD) is another Toronto-based miner with worldwide operations some of which includes copper as well as gold mining projects. The stock trades at 1.41 times its book value with a price-earnings ratio of 17.88. Barrick has a market cap of $33 billion and is widely traded with an average daily volume of 20 million shares. The company is paying a dividend of 2.10%.
The movement of price back above the 200-day moving average is a hopeful chart pattern (with no guarantees, of course). It’s a bullish look, too, that the 50-day moving average is trending upward again.
Hecla Mining Co (NYSE: HL) is based in Couer d’Alene, Idaho with Canadian headquarters in Vancouver, British Columbia. Market capitalization is $3.5 billion. The company pays a .39% dividend. Forward price-earnings ratio for Hecla is 48 and the stock trades at 1.68 times book. In mid-October, 2022, Canaccord Genuity upgraded its opinion of the company from “hold” to “buy” and raised its price target from $4.75 to $5.00.
The mid-December crossover of the 200-day moving average by the 50-day moving average is a bullish kind of sign. It’s been a steadily upward trend since the late September lows with the usual backing and filling.
Newmont Corp (NYSE: NEM
The price is now higher than the late-July range. The 50-day moving average has been trending upward for weeks and, if this continues, it’s likely that the price will take out the 200-day moving average which has been in decline.
Not investment advice. For educational purposes only.