SUPERNEWS

Macro

Gold Miners Poised for Surge as Futures Hit $2,186

Gold futures hit record $2,186.20, Schiff predicts gold miners to rally amid Fed rate cut expectations.

By Bill Bullington

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3/10, 14:22 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Barrick Gold Corporation
GOLD

Key Takeaway

  • Gold futures hit a record high at $2,186.20, signaling potential for gold mining stocks to rally as they've lagged behind.
  • Peter Schiff predicts an "explosive move up" for gold miners and hints at a gap up in gold prices to $2,200 if Bitcoin crashes.
  • Criteria for promising gold stocks include over $300 million market cap and average analyst price target 30% above current prices.

Gold's Record Rally

Gold futures soared to a new record high, closing at $2,186.20 with a 0.97% increase on Friday. Despite this significant rally in the yellow metal, gold mining stocks have not seen a corresponding increase in interest. The VanEck Gold Miners ETF, which comprises gold mining stocks, remained essentially unchanged during the session. Economist and gold enthusiast Peter Schiff believes that gold miners are set to play catch-up soon, suggesting an "explosive move up can’t be that far away."

The Lag in Gold Mining Stocks

Peter Schiff points to a potential reason for the lack of enthusiasm in gold mining stocks: investors might be selling these stocks to purchase Bitcoin instead. However, Schiff anticipates a strong opening for gold at the beginning of the next trading week, predicting a gap up to $2,200, especially if Bitcoin experiences a downturn over the weekend. This expectation sets a bullish tone for gold and, by extension, gold mining stocks, as Schiff advises investors to "buy the miners before the crowd realizes what’s going on."

Federal Reserve's Influence and Gold Stocks to Watch

The ongoing rally in gold is partly attributed to expectations that the Federal Reserve might reverse its rate hikes. Since gold is priced in U.S. dollars, it typically benefits from a weaker dollar, which could result from the Fed cutting rates. Additionally, gold's reputation as a reliable inflation hedge adds to its appeal in times of persistent inflationary pressures. Given these factors, Schiff and other investors are closely watching a list of gold stocks that could gain momentum. These include B2Gold Corp., Centerra Gold Inc., DRDGOLD Limited, Barrick Gold Corporation, Hecla Mining Company, New Found Gold Corp., NovaGold Resources Inc., Pan American Silver Corp., Seabridge Gold Inc., and Sandstorm Gold Ltd. These companies were selected based on criteria such as a market cap over $300 million, average trading volume above 500,000, a "Buy" or higher analyst rating, and an average analysts’ price target 30% above the current market price.

Street Views

  • Peter Schiff (Bullish on gold miners):

    "An explosive move up can’t be that far away. So buy the miners before the crowd realizes what’s going on."