Gold Has Just Started to Shine--Miners Should Glow in New Gold Rush
NetworkNewsWire Editorial Coverage
NEW YORK, June 2, 2020 /PRNewswire/ -- In times of financial crisis, there's no safer investment than gold. Gold's historic reputation as a safe haven asset will be a boon for mining companies as the global economy witnesses the plunging valuation of currency. Kingman Minerals Ltd. (TSX-V: KGS) (KGS Profile) has been preparing operations on a historic mine site in Arizona, benefiting from the cost efficiencies of revitalizing an already established exploration site. Coer Mining Inc. (NYSE: CDE) has recently reopened operations in Mexico as the country's government relaxed pandemic restrictions. Kinross Gold Corporation (NYSE: KGC) is hoping to benefit not only from renewed investor interest in gold but also from the mineral's applications in medical testing. Hecla Mining Company (NYSE: HL) has been expanding from silver into gold and has renewed operations in Quebec as precious metals mining was designated a vital economic activity. Agnico Eagle Mines (NYSE: AEM) has also recommenced work in Quebec after a shutdown that will affect many mining companies' output, but the company will still produce over a million ounces of gold this year.
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The Renewed Value of Gold
Gold has long been one of the most stable assets for investors, a safety net in an arena of economic risk. With the world facing a global health crisis in the form of COVID-19, and the prospect of a deep and extended recession looming in its wake, the precious metal is seeing renewed attention from investors. Bank of America recently raised its 18-month gold-price target to $3,000 an ounce, while others believe that gold is on the cusp of a new decade long bull market that will push the price well past $5,000 an ounce. Little wonder there's such strong interest in gold companies such as Kingman Minerals Ltd. (CVE: KGS).
While gold initially had a small retracement at the onset of the current crisis, it was just part of a pattern historically seen in every period of economic turmoil—one from which gold always returns, and one that has done nothing to undermine the asset's worth as a safe investment in a crisis. Gold has a number of advantages – it holds its value better than stocks, is more liquid than bonds, and as the original measure of wealth, it has retained its position of value while other alternatives have risen and fallen. While it doesn't have the spectacular returns some stocks do during boom times, it has always been a good hedge against a crisis and a reliable option in times of trouble.