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Inflation Hedge, Old School: Gold & Silver Stocks Perk Up

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The precious metals sector is showing strength after Fed Chair Jerome Powell said interest rates increases might not be as dramatic as thought. His comments got the bond market excited as yields fell and prices rallied. That this might allow inflation to stick around had some investors back in the gold and silver stocks.

Higher highs for the precious metals group have taken some time as the equities seemed to crawl slowly off of their 2022 lows. Is it another relief rally where the bottom seems to have formed and then the price continues to trend downward? Or is this the real rally that’s been eluding investors in the sector?

Here’s the daily price chart for Agnico Eagle Mines
AEM
(NYSE: AEM), with a market capitalization of $23.31 billion, one of the major players in the precious metals group:

You can see that in the month of December, the stock is now climbing back above the down trending 200-day moving average. Also, its 50-day moving average is now trending upward. The Toronto headquartered Agnico Eagle has a long way to go to achieve a higher high than the mid-April level of 65 but this new strength may be a positive sign.

Alamos Gold (NYSE: AGI), another Canadian-based miner, has a market capitalization of $5.01 billion, relatively small compared to the precious metals majors. The daily price chart looks like this:

This is one of the few gold mining companies actually making a new 52-week high, quite an accomplishment considering how tough it’s been for the sector. To a price chart analyst, it’s bullish to see how the stock is well above the up trending 50-day moving average and above the up trending 200-day moving average. The relative strength indicator (RSI, below the price chart) is showing a negative divergence, suggesting that Alamos Gold may be about to slow down and consolidate.

Barrick Gold Corp (NYSE: GOLD) is a major among the precious metals group with a market capitalization of $29.79 billion. Based in Toronto, the company is paying a 2.34% dividend. Here’s their daily price chart:

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The break-out above recent price peaks is clearly evident and marks a 5-month high for the stock. The price has moved rapidly out of that early November low — one month later it’s back above the 50-day moving average which appears to be trending upward again.

Newmont Corporation (NYSE: NEM) is the big player in the precious metals group. The market capitalization is a huge $38.45 billion. Investors receive a generous dividend of 4.53%. The daily price chart is here:

The move up is not quite as dramatic as the other miners listed here but it’s still a 4-month high. Newmont is making steady progress by managing to remain above the 50-day moving average for more than just a few days — it’s been a while. The possibility that a bottom may be in place is there.

Not investment advice. For educational purposes only.

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Source: Fox Business

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