Shares of gold mining giant Newmont Corporation (NYSE: NEM) are hitting a new 52-week high today as the price of gold ticks up. The US stock market and most global markets are weaker this Friday as news of the coronavirus has caused some selling this week. That has helped to put a bid on US Treasury bonds and the price of gold, which is over $11 this afternoon to trade over $1170 an ounce.
Times of weakness in the stock market has caused safety buying in bonds and precious metals such as gold and silver over the past twelve months. This trend benefits gold mining companies such as Newmont, because the higher the price of gold goes the more money they make. Newmont even increased its dividend payments recently in a press release:
“We are pleased to announce a planned increase to our annualized dividend by 79 percent to one dollar per share and will continue demonstrating our disciplined approach to capital allocation and the confidence we have in our business to deliver substantial future cash flows and returns for shareholders,” said Tom Palmer, President and Chief Executive Officer. “Our first quarter dividend will offer investors a highly competitive dividend yield and enhanced returns from owning shares of the world’s leading gold company.”
https://www.businesswire.com/news/home/20200106005552/en/Newmont-Announces-Plan-Increase-Annualized-Dividend-79
Take a look at the stock price.
I personally own shares of Newmont myself and see today’s action as a vindiction for those that are investing in gold and other mining stocks. Gold pulled back after the confrontation between the Trump administration and Iran earlier this month, but the prices stabilized this week and are turning up today.
Newmont historically has been a key leader for the sector and when it goes up the others tend to go up too. More mergers and acquisitions are expected for the mining sector this year by analysts with junior mining stocks set to really benefit. I personally am watching my favorite small cap silver stock today.
-Mike
