If you’re looking for top gold stocks today, you might be having a hard time. That’s because the equity side of things has stalled a bit. Tuesday’s rout in gold prices was felt across the market. What’s more, gold prices continued falling on Wednesday morning. Something to note, however, is that by 10AM EST, the price of gold had broken back above $1,900. During the early morning session, prices actually dipped below $1,875 for the first time since July 23rd.
Don’t get me wrong, 2020 has been called the year of the golden bull. Just because gold stocks themselves are down today, I don’t think that means we’ve come to the end of the road with gold. Is this the calm before the storm? If you can recall back during the early months of the year, the price of gold tended to move first with gold stocks following. Obviously, gold stocks today aren’t their shiniest but that might be expected considering the overall stock market itself.
Needless to say, sentiment remains high for the sector as analysts weigh in. Yesterday, most wrote off the dip to rising yields and vaccine optimism. As we’ve come to find, that might have been a bit fleeting. “Gold prices and US 10 year real yields have held a strong negative relationship over time. That’s largely because when US yields rise, gold looks less attractive since gold earns no income,” said Vivek Dhar in a note. Vivek is a mining and energy commodities analyst from Commonwealth Bank of Australia.Can Gold Stocks Recover?
Some of the top gold stocks today are lagging far behind the price of gold. Barrick Gold (GOLD Stock Report), Newmont (NEM Stock Report), Franco Nevada (FNV Stock Report), and even AngloGold Ashanti (AU Stock Report) are all trading lower on Wednesday. While it’s to be expected, it isn’t the universal trend across all gold stocks today.Barrick Gold Stock Chart
Take, for instance, a company we’ve written about frequently, Equinox Gold (EQX Stock Report). Not only has it reached new 52-week highs this month, but EQX stock price also hasn’t really suffered as big a blow as many other gold stocks. In fact, early morning highs on August 12th saw its share price come within less than $0.25 of its 2020 high.
Just a few days ago the company reported its quarterly results. ” Equinox Gold achieved strong operational and financial performance in the second quarter, despite the challenges of the COVID-19 pandemic, and again delivered record results with 127,000 ounces of gold produced, low all-in-sustaining costs of $900 per ounce, $85 million in earnings from mine operations and adjusted net income of $27 million,” said CEO Christian Milau. This was also the second consecutive quarter of record results for the company.Equinox Gold Stock Chart
“All of our mines are now operating normally with enhanced testing and safety protocols and we remain focused on protecting the health and economic wellbeing of our workforce and local communities while continuing to safely operate our mines.”Mining Stocks Show Strength
Equinox gold stock may have been one of the few anomalies in the stock market today. However, other companies with exposure to other metals have managed to weather the storm a bit more easily so far. Freeport McMoRan (FCX Stock Report) has traded sideways while other gold stocks plummeted this week. Aside from gold, the company also mines copper and holds claim to mineral deposits in Indonesia, Arizona, and Peru.
HudBay Minerals (HBM Stock Report) also pushed higher this week. The last major pullback in HBM stock was back in March with the rest of the market. Since then, HudBay has climbed back by more than 100%. This week the company reported its second-quarter results.
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The company said it’s on track to meet all production and cost guidance for its Manitoba production this year. It also reported a semi-annual dividend of $0.01CAD per share that’s payable on September 25th. The record date for that dividend is September 4th.
RioTinto (RIO Stock Report) was also among the leaders in the sector this week. RIO stock did pullback from its 2020 highs, slightly, however, the trend hasn’t broken down, overall. The company focus on a variety of minerals worldwide has diversified its portfolio and likely positioned it to perform during such a downturn in precious metals. Its heaviest concentrations are in North America and Australia with iron ore being the top focus. Lesser contributions come from aluminium, copper, diamonds, energy products, gold, and industrial minerals.Rio Tinto Stock Chart
When it comes to iron ore, specifically, some analysts have begun upgrading price predictions. J.P. Morgan recently gave a positive review on Monday. Credit Suisse has previously identified Chinese steel demand continuing to outpace market expectations. “Despite the global pandemic Chinese steel production is up 2.2% year-on-year, and for the month of June was up 4.5% month-on-month.”