Gold rallied about 1% in the past week, closing at a nearly one-month high of $1,484 an ounce on Tuesday. As a result, the majority of gold stocks shot up. Leading the way were Harmony Gold (NYSE:HMY), Sibanye-Stillwater (NYSE:SBGL), and Coeur Mining (NYSE:CDE), which all rallied around 10% on the same day. The TSX posted nine new 52-week highs and no new lows.
2019 has been an eventful year for gold with prices surpassing the $1,500 an ounce threshold during the third quarter. The global economic slowdown and trade spat between the United States and China contributed to the corrections in gold prices lately, persistent economic uncertainties indicate that the rally is likely to continue in the near future. Goldman Sachs has also retained its bullish stance on the yellow metal last month. Per the investment bank, prices of gold per ounces are expected to push to $1,600 in 2020.
The latest move in the price of gold and gold futures comes after President Trump’s comment suggesting that he could delay a partial resolution on the US – China Trade Deal until after the 2020 presidential elections. This could mean big things for certain sectors like mining and other safe-havens as speculation continues to grow.
In December the U.S. will add more levies on China exports if there’s no deal, increasing the likelihood of more tariffs. For gold miners, this is also music to their ears. Appetite towards the precious metal is likely to receive a boost if Washington moves ahead with the tariff hikes on December 15 according to industry analysts. With most gold mining stocks near critical resistance levels right now, a news catalyst like this could be just the thing to bring attention back to precious metals.
With the price of gold rising, it boosted the value of junior gold mining companies since they stand to make more money on their output. VanEck Vectors Gold ETF (GDX Report) rose by as much as 46.6% this year and it still up considerably since pulling back from its $30.96 highs. Harmony Gold also benefited from higher gold prices during its fiscal first quarter. The company received an average of $1,449 an ounce, well above the $1,315 it sold its gold for during the prior quarter. That surging price helped boost Harmony's revenue by 20% in that period.
As one of the top gold stocks to watch in 2019, Sibanye Gold Limited (SBGL Stock Report) continued its year-long rally this week. On December 3, Sibanye made yet another new high since Septmber; $8.60 in early morning trading.
Another strong performance came from Barrick Gold Corp (GOLD Stock Report). On December 3, it was another one of the gold stocks to watch. Shares of Barrick traded as high as $17.14 during premarket trading on Tuesday. The company is just coming off of a $750 million, all-cash deal having sold its 50% stake in Kalgoorlie Gold Mines to Saracen Mineral at the end of November.
The mining - gold industry has rallied 40.7% year to date compared with S&P 500’s 22.9% gain. Coupled with the delay in the trade deal between the U.S. and China, the price of gold is likely to continue to climb, benefiting gold stocks.