In a massively hyped Federal Reserve policy announcement Thursday, one that threatened to end the nearly seven year experiment with near zero percent interest rates and usher in the first rate hike since 2006, chairman Janet Yellen and her cohorts gave Wall Street exactly what they wanted: A no hike decision in line with futures market odds.
And yet stocks drifted lower. Why?
Moreover, it was a dovish pass: The Summary of Economic Projections revealed that at the median Fed officials now only expect a single rate hike by the end of 2015. The futures market is now pricing in just a 49% chance of a hike at the December meeting.
Until higher inflation becomes a clear and present problem, this continual moving of the goalposts for Fed rate hikes — deferring until more data comes in — looks set to continue. In her post-announcement press conference, Yellen admitted that they were “way below” their inflation target.
As a result, the U.S. dollar is under pressure while precious metals are getting a lift. Here’s a look at five names to keep an eye on — all of which have been recommended to Edge subscribers.
Gold Stocks to Buy: Goldcorp (GG)
Goldcorp (GG) is a gold miner with operations throughout the Americas, including the Los Filos property in Mexico.
GG was recently upgraded by Credit Suisse, which gave shares an “outperform” and a slightly raised price target, from $32 to $33.
Gold Stocks to Buy: Franco-Nevada Gold (FNV)
Franco-Nevada Gold (FNV) is a gold-focused royalty company based in the United States with interests in 246 mineral assets.
The company is reportedly in talks with Glencore to buy portions of production out of three South American copper mines that will produce some gold and silver as by-products. These types of deals work with FNV providing up-front cash investment to a miner in exchange for a right to a fixed amount of future output at a discounted price.
Shares of FNV are up more than 10% for Edge subscribers since recommended on Aug. 3.
Gold Stocks to Buy: Rangold Resources (GOLD)
Rangold Resources (GOLD) explores and develops gold mines throughout sub-Saharan Africa including the Kibali mine in the Democratic Republic of Congo.
Earlier this week, the company penned an agreement with AngloGold Ashanti (AU) to redevelop and operate AU’s Obuasi mine in Ghana.
Gold Stocks to Buy: Kinross Gold (KGC)
Kinross Gold (KGC) is a vertically integrated gold and silver miner with operations around the world in areas including Russia, Brazil, and Chile as well as the United States and Canada. At the end of last year, its proven and probable reserves included 34.4 million ounces of gold and 44 million ounces of silver.
Kinross announced on Thursday that it had lowered its all-in sustained cost per gold equivalent ounce sold to $975-$1,025 vs. $1,000-$1,100 previously.
Gold Stocks to Buy: Barrick Gold (ABX)
Barrick Gold (ABX) sells and produces gold and copper via its mine assets throughout the world in places including Saudi Arabia, Peru, and Argentina as well as the United States and Canada.
The stock was upgraded to “buy” by Deutsche Bank analysts back in August as the company seeks to divest some of its smaller U.S.-based assets.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
