4 Stocks in Gold that you should watch.
Why gold is still on the ascendancy?
The persons who held these stocks over the past year would have seen some handsome rewards for doing so. Market uncertainties definitely added a big boost to these market stocks even though the commodity may not have risen extraordinarily.
When thinking about gold stocks there are two things to consider: uncertainty and the strength of the dollar.
Investors have been placing more scrutiny on gold stocks. Unlike the commodity it is less affected by the depressive market forces and are able to rise with more ease. On all of that the possibility of a FED rate hike has made gold seem more like a safe heaven for those that are more risk averse.
However the problem for gold is the strength of the dollar. Since gold is denominated in dollars, a strong dollar will depress the demand for gold. It can be said with certainty that this will make gold seem more costly of an investment on the international markets relative to local equity and thus drives down its price. A fed rate hike could break this sentiment though. Watch the FED in the coming weeks to have an idea where gold may go.
Equities avoids this value depression as they thrive in low interest rate environments. In addition even if there is a rise in rates gold stocks still stand to profit greatly.
The stocks to watch for
1. Rangold Resources Ltd. (NASDAQ:GOLD). This stock is currently at $87.25 and has been declining over the past few weeks but is up overall since the start of the year. The company happens to be well managed and so is a decent investment whether you are bullish or uncertain.
2. Klondex Mines (NYSEMKT:KLDX) is also a next great pick. It is a company that is operating out of Nevada so there is little operating risk. In addition the quality of their mines is superb in construction and ore quality.It is in the process of expanding therefore there shouldn’t be any surprise that the value of its stock has tripled over three years to now trade at around $4.83
3. Newmont Mining Corp. (NYSE:NEM) operates at lower leverage than most other companies. Its main strategy to keeping competitive has been cost cutting. It has been very effective however.
4. Barrick Gold Corporation (NYSE:ABX) has shown steady progress throughout the past year. They have a
cash flow break even below $1,040 which allows them an excellent amount of flexibility. In addition they are in the process of cost cutting and effectivizing their current mines as well as equipment.