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Analysts and Gold Stocks: Five They Love and Five Not So Much

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Sep. 26 2018, Published 1:16 p.m. ET

Gold and gold stocks: Weak performances

In Why the Bottom for Gold Could Be Close, we highlighted how gold prices have been weakening since April but why the bottom could be close. Year-to-date (or YTD), the SPDR Gold Shares (GLD) has declined 8.2% as of September 24. Gold’s weakness in 2018 could be mainly attributed to the US dollar’s (UUP) strength and the higher interest rate outlook (TLT).

The VanEck Vectors Gold Miners ETF (GDX) has had a worse showing at -19.1% YTD, significantly underperforming the S&P 500 (SPY) and the NASDAQ Composite (QQQ), which have returned 9.1% and 18.1%, respectively. Among major gold miners, none of them have had positive returns YTD.

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Company-specific factors

Gold investors have been puzzled by the way gold prices (GLD) are falling amid ramped-up trade tensions and emerging market crises. The US dollar has gained most of the safe-haven bids, thus pressuring gold.

Gold miners have also been on the receiving end in 2018 due to company-specific issues along with weaker precious metal price performances.

Barrick Gold (ABX) has been affected by issues at its mines, and Kinross Gold (KGC) and Eldorado Gold (EGO) are under stress due to mining code changes and government interference in the geographies where they operate. New Gold (NGD) has been hit by mechanical and operational issues at its major mine.

Series overview

In this series, we’ll see which top five gold miners Wall Street analysts like based on their “buy” recommendations and which five they’re increasingly becoming bearish on.

The above chart shows the top and bottom five gold mining companies based on analysts’ recommendations. In the next part of this series, we’ll look at analysts’ ratings for Wheaton Precious Metals (WPM), the most loved precious metals mining company.

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