Gold Stocks Could Gain In Catch-Up Rally, Says Peter Schiff: 'Explosive Move Up Can't Be Far Away'

Zinger Key Points
  • Gold, denominated in the U.S. dollar, shares inverse relationship with the dollar, and the prospect of cuts is positive for the commodity.
  • Peter Schiff says gold mining stocks lagged the gold rally, potentially due to investors flocking to Bitcoin ETFs.

Gold has been on a tear of late and closed at a record high on Friday. An economist said on Friday gold miners have lagged the rally in the yellow metal and could soon play catch-up.

What Happened: Gold’s record run hasn’t sparked interest in gold mining stocks, said economist and gold bull Peter Schiff. On Friday, gold futures settled at $2,186.20, up 0.97%. Despite the development, exchange-traded funds comprising gold mining stocks were essentially unchanged in the session. The VanEck Gold Miners ETF GDX ended Friday’s session up 0.10% $29.64, while the VanEck Junior Gold Miners ETF GDXJ fell 0.42% to $35.93, according to Benzinga Pro data.

“An explosive move up can’t be that far away. So buy the miners before the crowd realizes what’s going on,” Schiff said.

Delving into the potential reasons for a lack of reaction among mining stocks, Schiff said it could be due to investors selling these stocks to buy Bitcoin BTC/USD ETFs.

Schiff also said he expects gold opening with a gap up at $2,200 on Monday.

“This is more likely to be the case if Bitcoin crashes over the weekend,” he said.

See Also: Best Gold Stocks Right Now

5 Gold Stocks To Keep A Tab On: Given the likelihood of the Federal Reserve reversing its rate hikes, the gold rally could continue. Gold, denominated in the U.S. dollar, shares an inverse relationship with the dollar, which could lose steam when the Fed cuts rates.

Gold is also a good inflation hedge and could be a go-to asset when inflationary pressure remain stubborn.

If the yellow metal adds further luster to it and gold miners follow it on the way higher, here’s a list of stocks that could be worth accumulating:

  • B2Gold Corp. BTG
  • Centerra Gold Inc. CGAU
  • DRDGOLD Limited DRD
  • Barrick Gold Corporation GOLD
  • Hecla Mining Company HL
  • New Found Gold Corp. NFGC
  • NovaGold Resources Inc. NG
  • Pan American Silver Corp. PAAS
  • Seabridge Gold Inc. SA
  • Sandstorm Gold Ltd. SAND

These stocks were screened based on the following criteria:

  • Over $300 million market cap
  • Average trading volume over 500,000
  • Analyst rating of “Buy” or higher
  • Average analysts’ price target is 30% above current market price

Read Next: ‘You Buy Gold And Hope It Doesn’t Go Up’: Surge In Gold Prices Sparks Investor Debate On Long-Term Value

Photo: Shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: Analyst ColorEquitiesLong IdeasNewsCommoditiesTop StoriesMarketsTrading IdeasGoldPeter Schiff
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!