Gold Miners Better Than Gold
Fiona Cincotta March 27, 2020 11:41 AM
As gold recovers it might be worth looking at gold miners
The price of gold has soared over 8% so far this week versus the US dollar. The precious metal has recovered the lost ground from earlier in the month when investors sold out of gold to cover losses elsewhere or to hold cash in a worst-case scenario mentality.
However, following a “whatever it takes” mentality from global central banks and $2 trillion in stimulus in the US, the selling of gold has eased off and buyers are returning to the traditional safe haven. Month to date Gold is trading +2% higher.
Rising gold prices are beneficial for those firms that mine and produce gold. Rock bottom oil prices are also an important part of the equation here, reducing input costs. Higher gold prices and lower fuel prices mean wider margins.
Stocks to watch
Barrick Gold is already up 12% so far this month outperforming the broader UK market, which is down 15% so far this month. However, the stock is also up 25% from a six month low struck last week.
Barrick is by no means alone. Polymetal International’s share price has soared by 33% after plunging to a six-month low on 19th March.
Polymetal Int. levels to watch
Polymetal trades above its 50, 100 and 200 sma on the daily chart, a bullish chart which is a rarity in this market!
Immediate support can be seen at 1272p today’s low, prior to 1255p (50sma) and 1222p (100 sma).
Resistance is at 1330p (today’s high) prior to 1346p (yesterday’s high) and 1392p (high 24th March)
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.