Here’s an unexpected twist for you in Tuesday morning’s trading. Gold prices are in decline, once again, coming off a much larger decline yesterday. Despite that, however, gold stocks—the folks that make their living on pulling gold out of the ground—are doing significantly better than they were at yesterday’s closing.
Several gold stocks recovered nicely from yesterday’s losses, though in most cases, they didn’t recover fully. Hecla Mining (NYSE:HL) was up nearly 2% in Tuesday morning’s trading, while Coeur Mining (NYSE:CDE) was up over 2%. McEwen Mining (NYSE:MUX) turned in a similar performance, while the star of the morning was IAMGOLD (NYSE:IAG), who bounced back over 4% in the morning’s trading. There was one loss, however, as Hudbay Minerals (NYSE:HBM) staged a decline of nearly 2%.
The problem was about what you’d expect, given macroeconomic conditions on the ground. A combination of a still-strong dollar plus soaring interest rates in the U.S made gold a much less attractive investment commodity than normal. With 10-year Treasury notes still making impressive advances, there are just better places to park money right now, or so the prevailing line of thought seems to be going. With front-month Comex gold closing yesterday at its lowest settlement values since March, and silver hitting a seven-month low as well, it’s clear that precious metals are under pressure right now. Though that pressure hit those who extract such minerals hard yesterday, recovery this morning suggests that investors are thinking that this too shall pass.
What are the Best Gold Stocks to Buy?
Right now, several gold stocks are considered Strong Buys by analyst consensus. Of these, the strongest may be Coeur Mining. Its average price target of $3.83 per share gives it an 81.95% upside potential. Meanwhile, of the two Moderate Buys covered today, IAMGOLD represents the least opportunity. With an average price target of $3.33, it offers investors a still-healthy 58.57% upside potential.
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