3 Gold Stocks on the Move

by Anthony Mirhaydari | June 5, 2014 2:21 pm

3 Gold Stocks on the Move

The announcement of new stimulus measures by the European Central Bank has sent buyers into gold and silver, as well as the related miners, in a way that hasn’t been seen since early May. If it continues, it could mark a significant change in trend for silver and gold stocks, which have been under pressure since March.

Gold185 3 Gold Stocks on the Move [1]
Source: Flickr[2]

A combination of diminished geopolitical concerns (the Ukraine situation has largely dropped off the radar for most investors), a drop in stock market volatility, and a steady decrease in inflation expectations have all played a role.

But now, some of this is starting to shift.

Inflation expectations are creeping up as the U.S. Consumer Price Index hits 2% while the ECB’s actions confirm its willingness to respond to the very real threat of deflation in the eurozone. And while stocks keep powering higher, I am starting to see some volatility in the currency markets.

All of this is causing gold and silver to perk up — and sending buyers into the following three gold stocks:

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Gold Stocks on the Move: New Gold (NGD)

060514 NGD gold stocks 300x183 3 Gold Stocks on the Move
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New Gold (NGD[3]), with operations in the United States, Canada, Australia and Chile, saw its shares drop 25% between March and April to test lows set last December.

The company’s fundamentals remain solid, beating earnings estimates back on April 30 on a low all-in cash cost of $674 per ounce — resulting in strong free cash flow.

At the very least, I’m looking for a retest of the February-March highs, which would be worth a 16% gain from here. I’m adding NGD to my Edge Sample Portfolio[4].

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Gold Stocks on the Move: NovaGold (NG)

060514 NG gold stocks 300x183 3 Gold Stocks on the Move
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NovaGold (NG[5]) is a on a roll, punching through both its 50-day moving average as well as its upper Bollinger Band in a show of strength.

There has been some unusual call option activity in the stock ahead of the company’s annual general meeting today. The company is a exploration-level company focused on the Donlin Gold project in Alaska.

I’m adding NG to my Edge Sample Portfolio[4].

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Gold Stocks on the Move: Royal Gold (RGLD)

060514 RGLD gold stocks 300x183 3 Gold Stocks on the Move
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Royal Gold (RGLD[6]), with its main operations in the United States, Canada, Chile, Mexico and Spain, has enjoyed a more stable share price performance over the last few months.

Shares are down only about 10% from their March high thanks to a solid earnings beat on May 1 due to stable production and favorable analyst coverage — including an initiation with a “buy” rating by Morgan Stanley on May 29.

I’m adding RGLD to my Edge Sample Portfolio[4].

Anthony Mirhaydari is founder of the Edge[7] and Edge Pro[8] investment advisory newsletters, as well as Mirhaydari Capital Management[9], a registered investment advisory firm.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/11/Gold185.jpg
  2. Flickr: http://www.flickr.com/photos/56511114@N03/
  3. NGD: http://studio-5.financialcontent.com/investplace/quote?Symbol=NGD
  4. Edge Sample Portfolio: https://www.edgeletter.com/sample.php
  5. NG: http://studio-5.financialcontent.com/investplace/quote?Symbol=NG
  6. RGLD: http://studio-5.financialcontent.com/investplace/quote?Symbol=RGLD
  7. Edge: http://www.edgeletter.com/
  8. Edge Pro: http://www.edgeletterpro.com/
  9. Mirhaydari Capital Management: http://www.mirhaydaricapital.com/

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