Precious metal in sight: the price of gold: will it be a golden summer too? | News


Markus Buler, Euro on Sunday

DThe concept of golden autumn should be familiar to most people. But the question gold investors are asking themselves: what are the chances of a golden summer? It’s not about the weather, it’s about rising gold prices. Since its low of $ 1,787, the price of gold has already risen to around $ 80. However, the whole thing was not spectacular. The gold stocks did not trigger the fireworks display, and the younger silver brother was unable to follow suit to the same extent. The move at Gold is still on shaky ground.

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$ 1,860 as a tough resistance

A look at the chart shows that the area around $ 1,860 has emerged as stubborn resistance. It is surprising. This sign should actually represent only minor resistance. Our focus is on the area around the previous all-time record of $ 1,920 set in 2011. However, after the $ 80 rally, gold prices deserve some respite. And until the price of gold drops below $ 1,835 again, eyes will continue to turn upward.

Regardless of the chart, another circumstance gives hope that it will be a golden summer. Especially for investors investing in gold mining stocks. The takeover activity is gaining momentum again. South Africa-based Gold Fields made a takeover bid for Yamana Gold on Tuesday. If shareholders approve the merger, it would create the fourth largest gold producer in the world. Only Newmont, Barrick Gold and Agnico Eagle can produce more than a combination of these two groups. After a long lull in the industry following Agnico Eagle’s acquisition of Kirkland Lake Gold, the acquisition carousel seems to be turning again. And that should dispel the lethargy in gold mining as well. Looking at company valuations, they are historically cheap and have room for improvement, even if the price of gold has only stagnated.

The gold mines are promising

After B2Gold acquired a smaller exploration firm Oklo Resources last week, Gold Fields’ acquisition of Yamana is now gaining momentum. The chances of gold mining stocks outperforming gold over the summer are high. Speculative-minded investors should therefore pay attention to potential second-tier takeover candidates. These include Alamos Gold (WKN A14 WWB) and Kinross Gold (A0D M94).

Conflict of Interest Notice:The majority owner of the sole shareholder of Finanzen Verlag GmbH, Mr. Bernd Frtsch, took direct and indirect positions in the following financial instruments mentioned in the publication or related derivatives that may benefit from price changes resulting from the publication: Barrick Gold.

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