As Gold Prices Rise, So Do These Penny Stocks
If there’s one thing that’s performed well during market uncertainty, it’s gold. The precious metal has been one of the top “recession-proof” classes to track. If you look back at 2008-2009, gold stocks & gold penny stocks, in particular, were some of the top performers in the stock market. now that we’re seeing the potential for another recession, the topic of gold has come up more frequently. Many industry heavyweights are looking at gold with more bullish potential right now as well.
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In a recent conference call, Chairman of NovaGold (NG – Free Report), Thomas Kaplan said, “I think Ray Dalio had it right when he said that those who don’t own gold either don’t understand history or the economics of gold. And he gave reasons for owning gold as a currency. Sam Zell, because there are no new mines coming online. Mark Mobius, because of diversification. Ken Rogoff, because of the emerging markets. Jeff Gundlach, gold is coiling like a snake. Looking at the chart pattern. Paul Tudor Jones, same thing, gold will be the trade of the year.”
This idea may be easily justified right now as well. The price of gold has been on the rise for the last 4 sessions. In fact, since the start of April, gold has jumped from $1,589 to highs of $1,696 during the morning session on April 6. Given this case, the volatile market waters could be hedged with some gold exposure. What’s more is that during times of a bull market in gold, the junior gold penny stocks have tended to outperform the majors.
Penny Stocks To Watch: IMC International Mining
Shares of IMC International Mining (IMIMF – Free Report)(CSE:IMCX) have been on the move since late-March. In fact, since March 24 both volume and price have reached record levels on the U.S. and Canadian exchanges. The initial excitement surrounding the company stemmed from a pending acquisition announced in late-February. This is when IMC signed a letter of intent to acquire Thane Minerals and its Cathedral Property in British Columbia. Over the month to follow, IMC signed a definitive agreement as well as formally closed on the acquisition lat week.
On a corporate conference call, incoming Chairman, Greg Hawkins explained the importance of the location of the Cathedral claim. He further stated a robust strategy to begin exploration by the summer and digging before the end of the year. Well, in a recent update, that plan may have just realized some near-term progress. On April 6, the company announced that it has engaged CME Consultants Inc. to conduct exploration and prospecting on the Company’s Thane Property including the Cathedral Prospect.
Following the announcement, shares of IMCX in Canada reached all-time highs of $0.62CAD and its U.S. counterpart, IMIMF hit highs of $0.48USD on record trading volume. The company will also be hosting another conference call on April 7th to discuss additional information about the project and we would think this latest update could also be a topic of discussion. For more information on IMC International, Click Here.
Penny Stocks To Watch: Harmony Gold
Shares of Harmony Gold stock (HMY – Free Report) have also jumped on Monday. The gold penny stock finished out last week around $2. On April 6, Harmony stock jumped to highs of $2.43 before noon. While there wasn’t much by way of news from the company, you can’t ignore the correlation with the price of gold so far.
But unlike IMC, which is making big progress in North America, Harmony has put a pause to its progress. In an update late last month, Harmony announced that all of its underground mines in South Africa have ceased operations. This wasn’t based on the company’s inability to operate in any way. Rather, the government mandated a 21-day lockdown in the country that runs until April 17.
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The company expects to “only” produce between 650 kilograms to 700 kilograms of gold in South Africa during the 21-day period, according to a statement. Needless to say, the limited supply and increasing demand could be a strong case supporting economics behind a bullish gold market in the meantime. As gold prices continue to surge, so has the price of Harmony gold stock. Can that continue through April? This will be a good question considering that HMY is still far off its previous highs but may have also formed a double-bottom pattern, which is traditionally a bullish chart pattern.
Penny Stocks To Watch: B2Gold
Another one of the gold penny stocks to watch has been B2Gold (BTG – Free Report)(TSX:BTO). The penny stock has followed a similar trend as the price of gold since March 16. This is when most of the gold sector dropped to its 2020 lows. While some (like IMC International) didn’t budge, B2Gold dropped to lows of $2.16 from a 52-week high of $4.93. Over the weeks to follow B2Gold stock has climbed back to highs of over $3.80 this week.
Similar to Harmony, B2Gold has implemented safety precautions in response to COVID-19 and the global outbreak. But according to the company, it hasn’t experienced any incidents of the virus at its sites or corporate offices. On top of that, the company also reported that it expects to meet its budgeted gold production estimate for the first quarter of the year.
B2Gold announced at the end of March that it resumed operations at its Masbate mine in the Philippines. It’s also conduction mining and milling operations at the Fekola Mine in Mali and Otjikoto Mine in Namibia. What’s also important to take a closer look at is the B2Gold stock chart. As you’ll see, it’s approaching a technical level of support and resistance; the 50-day moving average (yellow line).
For most of the month of March, the 200-day moving average (red line) has acted as a resistance point. As of April 6, shares broke through the resistance and now B2Gold stock is heading to the 50DMA. Will the sector momentum be enough to push this gold penny stock back above $4?
Disclaimer: Pursuant to an agreement between Midam Ventures LLC and IMC International Mining Corp. (CSE: IMCX) (IMIMF), Midam has been paid $200,000 for a period from January 7, 2020, to February 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to March 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to July 9, 2020. We may buy or sell additional shares of IMC International Mining Corp.(CSE: IMCX) (IMIMF) in the open market at any time, including before, during or after the Website and Information, to provide public dissemination of favorable Information about IMC International Mining Corp. (CSE: IMCX) (IMIMF). Full disclaimer here.
