Investors turn towards gold mining companies as gold prices rise

By CanadianMiningReport.com Staff Writer / June 10, 2020 / Article Link

Gold is attempting to make a comeback as it emerged above $1,700 at the beginning of the week. With the market mood worsening the S&P 500 corrected lower after previously erasing its gains for 2020. All data points to the precious metal continuing to attract buyers.

Although the global pandemic and growing concerns regarding a new trade way between US and China may have thrown major stock markets for a loop this year, the chaos has created a serious buzz around the gold market. Investors are moving into gold for its safe-haven status, driving demand and gold prices up over the past several months, leaving gold miners in better financial shape than in 2008.

Analysts expect to see more gold miners M&As later in the year as things have rarely looked so good for gold and junior gold miners.

An increased interest in gold investments saw Canadian gold ETFs pull in $382-million in April. This represents the biggest monthly gain in four years, according to the National Bank's monthly ETF-flows report. Canada's gold ETF market is now worth almost $3 billion, which is double from a year ago. At the same time, gold ETFs worldwide has attracted $14.5 billion in just five months, topping the $11.7 billion that flowed into the funds in 2009.

The erratic behavior or markets in the past several months saw the price of gold consistently breaching the $1,700 mark. As a result, gold stocks of Canadian junior gold miners have begun to garner investor interest. Gold miners operating in prolific gold regions like the Abitibi Greenstone Belt are of particular interest. Abitibi is one of the most prospective geological terranes in the world for gold. Over the past century, more than 170 million ounces of gold have been produced from the Abitibi Greenstone Belt, which measures 500 kilometers (310 miles) by 350 kilometers (217 miles) and spans the Ontario/Quebec provincial border.

Some of the major Canadian gold miners operating in the Abitibi include Eldorado Gold (NYSE:EGO) (TSX:ELD), Kirkland Lake Gold Ltd. (NYSE:KL) (TSX:KL), Newmont Mining Corp. (NYSE:NEM) (TSX:NGT), IAMGOLD Corporation (NYSE:IAG) (TSX:IMG), and Agnico Eagle Mines Limited. Notable junior Canadian gold exploration companies who are advancing gold projects in Abitibi include Osisko Mining Corp, Wallbridge Mining Company Ltd., and Genesis Metals Corp. (TSX-V:GIS) (OTCQB:GGISF).

The current strong interest in the gold sector is focusing investor attention on junior gold mining companies like Eldorado Gold, Kirkland Lake Gold Ltd, IAMGOLD Corporation, Agnico Eagle Mines Limited, Osisko Mining Corp., Wallbridge Mining Company Ltd. and Genesis Metals Corp. (GIS.V) (GGISF.QB).