Gold Silver Mining Stocks Breaking Out

These Three Silver And Gold Stocks Break Out As Precious Metals Shine By Investors Business Daily

Kirkland Lake Gold (KL), SSR Mining (SSRM) and Pan American Silver (PAAS) broke out Wednesday, joining a host of mining stocks that are clearing or nearing buy points. The iShares Silver Trust ETF (SLV), which tracks the price of silver, broke into a buy zone.

The broad sector move for gold and silver mining stocks comes as the U.S. dollar is losing ground against international currencies. That boosted the gold price 0.8% to an eight-year high of $1,823, clearing the $1,800 level for the first time since 2011. Silver rose 2.4% to a 10-month high of $19.16.

Higher gold and silver prices go straight to the bottom line of miners whose cost of production is below the current price. Kirkland Lake got a further lift on Tuesday when it reported better-than-expected production of 329,770 ounces of gold in the second quarter.

Gold, Silver Stocks Sparkle

Kirkland Lake stock leapt 8.3% to close at 47.53, clearing a buy point at 44.33, according to a MarketSmith analysis. The breakout carried Kirkland Lake just past the top of the 5% chase zone.

SSR Mining rose 5% to 22.74, past a 22.60 buy point. SSR Mining has gold and silver operations.

Pan American Silver stock surged 7.9% to 32.47, breaking through a 30.69 buy point, just within buy range for the moment.

After clearing a buy point on Tuesday, the VanEck Vectors Gold Miners ETF (GDX) pushed higher on Wednesday, rising 3.3% to 38.96. The gold play is still within buy range from a 37.59 buy point.

The iShares Silver Trust ETF gained 2.8% to 17.49, clearing a 17.20 cup-with-handle buy point.

Barrick Gold (GOLD) rose 2.6% to climb within 3% of a buy point at 28.60.

In addition to its precious-metal characteristics, silver also has industrial applications, including in electric cars and 5G infrastructure. Some other industrial metals also are on the rise, notably copper. The near-term copper contract rose to its best levels since January.

Southern Copper (SCCO) increased 1.6% to 40.65, just above a 40.41 buy point from a cup-with-handle base.

Will Gold Price, Silver Price Rise Like Its 2009?

Many on Wall Street believe that precious metals could shine for a long time, much like the run from 2009 to 20011. Like then, the Federal Reserve has its benchmark rate near zero, budget deficits are in the stratosphere, and the Fed is enabling fiscal stimulus via quantitative easing.

On June 19, Goldman Sachs hiked its 12-month gold price target to $2,000 an ounce from $1,800, saying dollar “debasement fears remain the key driver of gold prices in a post-crisis environment such as this.”

In April, Bank of America put a $3,000-per-ounce 18-month price target on gold.

The post-financial-crisis run for precious metals came to an end in 2011, after the GOP regained control of the House and forced Democrats to hit the fiscal brakes. At the moment, though, it looks like Democrats could sweep in 2020, keeping the fiscal spigot open.

Goldman Sachs said it could see gold rising past $2,000 if inflation perks up amid all that spending but the Fed doesn’t tighten in response.

The U.S. economic recovery has downshifted in recent weeks and is at risk of stalling amid an upsurge in Covid-19 cases and new government restrictions. If the economy backslides, the dollar could regain its safe-haven status. For now, though, that negative has been offset by the combination of a soft dollar and optimism over the recovery in China, the biggest consumer of industrial metals. Chinese stocks, led by Alibaba (BABA), have surged this week.