Spot prices for oil and gas have been hit hard by turbulence generated by what is happening in mainland China right now. The Chinese government has closed off Wuhan and several key cities to contain the outbreak. Deaths from the Coronavirus rose above 1,000 this past week.
Precious metals have enjoyed an uptick in the opening weeks of 2020. Worries over this outbreak have bumped up spot prices, but gold stocks have still lagged in a healthy market. Today I want to look at two gold equities that are well-positioned to gain momentum as the spot price of the yellow metal strengthens.
Barrick Gold (TSX:ABX)(NYSE:ABX) is one of the largest gold producers in the world. Its shares were up 3.42% in early afternoon trading on February 14. The stock has increased 48% year-over-year at the time of this writing. This past week Barrick raised its dividend even as its profit fell from the prior year.
Kinross Gold (TSX:K)(NYSE:KGC) is another top Canadian gold producer. Its stock has surged 59% from the prior year as of early afternoon trading on February 14. In its fourth quarter and full-year results Kinross saw gold production hit its full-year guidance on the nose. Net earnings grew to $717 million in 2019 compared to a $25.6 million loss for the full year in 2018.
I’m still bullish on gold stocks to start this year, especially as the yellow metal has flourished in the face of a roaring broader market. Geopolitical strife and loose monetary policy will maintain a steady floor and an attractive ceiling for gold.
