Stocks continue to rise this week on rising hopes of more cheap money stimulus from the world’s major central banks. The Dow Jones Industrial Average has retaken the 16,000 level. Crude oil is rebounding. Inflation expectations are on the rise again. And gold and silver are on the rise, lifting out of a multimonth consolidation range to be one of the top performing asset classes so far this year.
In the case of the Federal Reserve, it’s a matter of whether policymakers hold off on any further rate hikes until later this year. When the Fed raised rates in December for the first time since 2006, they teased another four quarter-point hikes in 2016 vs. the single hike (at most) that the futures market currently expects.
If they acquiesce to where Wall Street is, gold and silver and the related mining stocks are set to surge on a combination of higher inflation expectations and a likely weakening of the U.S. dollar. That’ll be great news for the precious metals mining industry — an area of the market I’ve been recommending for months.
And it will be great news for these five individual gold and silver stocks.
Silver Wheaton Corp. (USA) (SLW)
Silver Wheaton (SLW) shares are climbing back up after testing down to the lower end of the trading range going back to July. The stochastic indicator flashed a buy signal with a pattern of higher lows, setting up a challenge of the 200-day moving average near $14.50 — a 30%-plus move from here.
In a presentation to investors, SLW forecast a gold production increase of more than 40% over the next five years.
Edge subscribers gained 4.9% in the position on Tuesday.
First Majestic Silver Corp (AG)
First Majestic Silver Corp (AG) shares have also moved down to test the lower end of the consolidation range going back to August. Like SLW, a move to test the upper end of the pattern, and challenge resistance from the 200-day moving average, should be worth a 35% gain from here.
On Nov. 16, the company reported a 10% rise in year-over-year revenue and a 28% drop in all-in production costs. On Jan. 19, it reported record quarterly production for the fourth quarter.
Edge subscribers gained 5.9% in the position on Tuesday.
Goldcorp Inc. (USA) (GG)
Goldcorp Inc. (USA) (GG) shares are recovering from a head-fake breakdown out of the November-December low, setting up a challenge of the post July high near $15 — which would also involve a challenge of the 200-day moving average. That would be worth a 35% gain from here.
The company will next report earnings on Feb. 26.
Edge subscribers gained 3.8% in the position on Tuesday.
Barrick Gold Corporation (USA) (ABX)
Barrick Gold Corporation (USA) (ABX) shares are breaking up and over their 200-day moving average for the first time since May — pulling away from a consolidation range going all the way back to July. On Jan. 21, the company announced preliminary 2015 full-year production of 6.1 million ounces of gold (in line with upgraded guidance).
Edge subscribers are already enjoying a 28% month-to-date gain in the stock. The company will report earnings on Feb. 18 after the close.
Kinross Gold (KGC)
KGC has bounced off of its September lows and now pushing back toward the upper end of the long downtrend pattern that started in 2011. Merely a return to the 50-day moving average would be worth at 13% gain from here.
The company will next report results on Feb. 10 after the close.
Edge subscribers gained 4.6% in the position on Tuesday.
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.
