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)
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.