Gold prices increased 1% on Monday after news of the singing of the new $ 2.3 Trillion bill that contains $ 900 Billion in pandemic relief aid and $ 1.4 Trillion in government spending to fund federal agencies. Many analysts see this bill as crucial in removing the immediate uncertainty with distribution of checks and loans to individuals and small businesses. Vaccine rollouts also continue on track as fears of a January wave of COVID-19 intensify.
The demand for gold and the price of precious metals is a reaction to the additional economic stimuli for business and individuals. Such measures also impact On Monday, gold tested the upper level of its main retracement zone at USD 1870.30 to USD 1894.60.
Now, investors look towards 2021 while looking for indications that gold will retain its bullish run into the new year. Additionally , another factor to consider is the anticipated gold miners' production rebound in 2021. Many junior gold miners and exploration companies are entering 2021 with strong balance sheets and considerable assets for development.
It is reasonable to expect some retraction and/or loss in gold output due to the pandemic and related restrictions. However, gold production will likely rebound quickly due to the increased demand and efficient supply chain.
Several gold miners have had their mining stock register attractive gains. Among them, Clarity Gold Corp. (CSE: CLAR), NovaGold Resources Inc. (NYSE: NG), Yamana Gold Inc. (NYSE: AUY) (TSX: YRI), Alamos Gold Inc. (NYSE: AGI), Hecla Mining Company (NYSE: HL).
NovaGold Resources Inc. (NYSE: NG) is one junior gold miner that announced exciting developments for its flagship Donlin Gold project, earlier this year. "We are very pleased to see the issuance of key transportation and energy infrastructure approvals for Donlin Gold," said Greg Lang, President and CEO. The company’s recent drill program is encouraging and continues to yield excellent high-grade intercepts and significantly improve geological modeling. Assuming a bullish gold price at or above $1,950 per ounce, NG may eventually retest $12.
The gold stock of Yamana Gold Inc. (NYSE: AUY) (TSX: YRI) is also looking promising as earlier last year exploration results for the Cerro Moro mine in Argentina, show significant high-grade intersections in an entirely new zone and extensions of previously identified zones. These exploration results demonstrate a growing mineral resource base in new areas that are expected to establish Cerro Moro as a long-life, high-quality, high-grade gold and silver operation. The Company has committed to an initial four-year exploration program, which began in early 2018, to systematically explore Cerro Moro.
For this reason, Yamana Gold is an inspired choice for value investors. It has a Zacks Rank #3 with a current quarter consensus estimate has risen by 37.5% in the past two months, while the full year estimate has increased 14.8%.