With Covid-19 on the rise, stimulus talks still going on, and an election around the corner, many investors are turning to silver and gold stocks. While the stimulus package may be halted for now, gold prices have continued to rise. Despite short term bearish trends in gold during last weeks’ trading, many believe that gold stocks will rise again. In early August, gold bullion hit a record high before falling in the subsequent weeks.
The main reason behind this is due to global uncertainty surrounding Covid and the above mentioned factors that pertain specifically to the U.S. When turmoil hits world economies, investors often turn to gold stocks and other precious metal stocks as a way to safeguard ones investments. This is because gold often rises in value when tumultuous geopolitical situations arise. Similarly, silver stocks tend to rise and fall with the value of gold. The two popular precious metals tend to have a very high correlation with one another.
Albeit, silver stocks and silver bullion are much cheaper than gold, which gives investors less of a barrier to entry. In addition, the price of oil has dropped significantly, with WTI trading at $39.75 as of Friday, October 23rd. Given that oil is one of the resources needed to mine gold, gold could become cheaper to mine in the coming months. This means that there could be a heightened chance of profitability if things continue the way they are. While gold stocks are in no way a guarantee of success, they can present a better and less volatile investment for some.Are Precious Metals Stocks A Buy?
While it is difficult to make any definitive statements right now, it does look like there is a lot of bullish sentiment for precious metals stocks. This includes both gold and silver stocks to watch. Because the future is so uncertain, it seems likely that many investors would continue to turn to safe haven investments like precious metals. But, the uncertainty of the future also means that it is hard to predict what will happen. With this in mind, investors should continue to keep an eye on both gold stocks and silver stocks moving forward.Precious Metal Stocks to Watch:
- Walcott Resources Ltd. (OTC : WALRF Stock Report) (CSE : WAL)
- New Gold Inc. (NGD Stock Report)
- Iamgold Corp. (IAG Stock Report)
Walcott Resources Ltd. is a mining company that has holdings in several locations around the world. The company states that it works in the acquisition, exploration and mining of precious metals and resources. Walcott Resources has made big moves in Australia, where silver concentrations have been known to be extremely high. Its main project known as the Tyr Project is based in Australia. Recently, the company announced that it has plans to re-open two of the historic silver mines located within the Tyr Project. These mines have resource estimates of high-grade surface mineral occurrences at around 4,710 grams per ton of silver (g/t Ag). This is quite a high concentration of silver and shows that there is a lot of potential at this mining project.
On October 22nd, Walcott Resources announced the appointment of a new CEO and director. David Thorne, who will take on the position, is known for being a “seasoned executive with a background in management, finance, and corporate development with public companies in the resource sector. This should help to give investors confidence in the future of the company.
In addition to announcing new leadership, Walcott Resources also stated that it has closed on the acquisition of 60% of 1256714 B.C. Ltd. this acquisition gives Walcott Resources unprecedented access to the Tyr Silver Project and another project known as the Century South Silver-Zinc Project. The deal offers Walcott 60% of the outstanding shares of 1256714 B.C. Ltd. in exchange for 15 million common shares of Walcott. With this acquisition considered, it looks like Walcott has several new and unique opportunities going for it in the long term. If all things continue to go according to plan, Walcott should remain a leading silver stock to watch.Precious Metal Stocks to Watch: New Gold Inc.
New Gold Inc. is a large miner of gold bullion based out of Canada. On October 13th, New Gold Inc. announced its production results for its third quarter. During this period, the company reported much greater production numbers as well as $415 million in free cash.
In the third quarter, New Gold Inc. also announced revenue of around $156 million which is quite substantial. Compared to its previous quarters revenue of $128.5 million, we see that this is quite a large gain. Of course, we have to account for the effects of Covid on mining efficiency production amounts. Although this revenue amount is not a record for the company, it is growing slowly.
Year-to-date, NGD stock has greatly outperformed the VanEck Vectors Gold Miners ETF (GDX Report). While the GDX rose by 47% YTD, NGD shares have shot up by 109% in the same period. In terms of production, New Gold Inc. is down by around 10% compared to the same quarter of the previous year.
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But, compared to the previous quarter, New Gold Inc. is producing around 15% more. If gold prices continue to rise, we could see more positive sentiment with large gold stocks like NGD stock. And, with production and revenue on the rise, New Gold Inc. continues to be a gold stock to watch.Precious Metal Stocks to Watch: Iamgold Corp.
Iamgold Corp. is another large Canadian gold mining company with operations around the world. The company reportedly has four mines currently operating which together are producing around 800,000 ounces of gold per year. In the past few months, we have watched Iamgold Corp. continue to explore new mines across the three continents it works in. When prices of gold bullion rose earlier in the year, Iamgold took advantage and began reducing its standing debt amount. Since that time, the company has completed paid off its debt, which investors have taken note of.
In addition, the price of IAG stock has also shown this change. YTD, IAG stock is only up by around 6% which is not an incredible growth amount for swing traders. But, with widespread market volatility, we can look at this price as a sign of the companies stability. Since mid-March, shares of IAG stock have shot up by almost 95%. Since early October, shares of IAG are still up by around 6%. With this in mind, investors continue to see benefits in investing in one of the largest gold miners in the industry. With a lot of growth on the horizon, there could be more value in the future of IAG stock as well.