Gold prices are staying consistent, and gold stocks are on the up. So what makes now the time to invest?
A lot has changed in a short time for the gold market. After prices for the precious metal fell below US $1,500/oz following the initial impact of the COVID-19 coronavirus pandemic in March, gold prices quickly recovered and soared into April.
Now, more than a week into May, prices have consolidated around US $1,700/oz. For analysts comparing the price of gold to rising markets amidst worsening economic data and high unemployment, the consistent pricing is more than reassuring, it’s favourable.
Gold’s status as a safety investment, especially as one that has already bounced back in the middle of the pandemic, leaves it relatively safe from potential shocks down the line. If the pandemic worsens, or economic data starts taking a toll on markets, gold stays safe.
But the fact that gold prices have stayed consistent in April also means that the precious metal has the foundation for a major run. Recent analyst and economic calls have reiterated that gold has the legs to climb significantly once the economy returns to normalcy, and the consistent pricing for now is simply gold lying in wait before a run above even US $2,000/oz.
And while gold has fared well over the past month, gold stocks have fared even better. From the largest majors like
Barrick Gold Corp. (
TSX:ABX) pictured above, down the line in market-cap to
Kirkland Lake Gold Ltd. (
TSX:KL) and
Kinross Gold Corp. (
TSX:K), everyone’s price charts have seen sustained rises into May.
The good news for gold investors and speculators is that the strength of the market is permeating all the way down. Unlike earlier price movements which were positive for producing majors but didn’t trickle down to potential productions, developing companies like
Wallbridge Mining Co Ltd. (
TSX:WM),
Great Bear Resources Ltd. (
TSX-V:GBR), and
Calibre Mining Corp. (
TSX:CXB) are seeing the same trend.
Smaller-cap exploration plays with some established groundwork are also seeing shares rise, such as
Osino Resources Corp. (
TSX-V:OSI) and
Vanstar Mining Resources Inc. (
TSX-V:VSR). Others that are still in early-stage exploration haven’t risen, but they’re a result away from seeing the same benefits.
With the strength of gold market apparent, and the foundation established for experts to expect gold prices to head well above US $2,000/oz in the long-run, it’s as good a time to invest as any. Of course, there are always unforeseen short-term hurdles that will pop up and potentially hamper individual companies or the market itself, such as reinstated lockdowns or work stoppages to combat the pandemic. But mining investors know to look for the long-term, and the long-term for gold is bright and sunny.
New to investing in Gold? Check out Stockhouse tips on How to Invest in Gold Stocks and some of our Top Gold Stocks.
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FULL DISCLOSURE: Calibre Mining Corp., Osino Resources Corp., and Vanstar Mining Resources Inc. are clients of Stockhouse Publishing