Barrick Gold: This Stock Is Explosive
Joshua Rodriguez | Jul 07, 2016 12:38AM ET
The investing landscape has been a very interesting one this year. Unfortunately, we've seen incredible volatility, which has made picking profitable stocks a bit more complex. Nonetheless, even in highly volatile markets, we find incredible opportunities. One of those opportunities is Barrick Gold (NYSE:ABX). Lately, the stock has been skyrocketing, and if history is any indication, the gains are going to continue. Today, we'll talk about why ABX is climbing and why the gains are likely to continue for quite some time.h3 Why ABX Is Climbing In Value/h3
The reason Barrick Gold is climbing in value is relatively simple. You see, the company is the world's largest gold mining company. As a result, the company is really in the right market at the right time. At the end of the day, when gold gains in value, profits at ABX get larger, and gold is going to grow.
Gold, like any other commodity, is largely dependent on the law of supply and demand. Low supplies and high demand ultimately lead to gains in value. Also, gold is a safe-haven investment, which makes gauging price movements a bit more complex.
As a safe-haven investment, the demand for gold tends to climb when economic or market conditions are called into question. The truth is that, for the first half of the year, there have been more questions about the global economy and global market than there have been answers. So, we're seeing big gains in the demand for gold, and, therefore, the value of gold. The fact that the price of gold has climbed by 25% through the first half of the year has supported an incredible bull run on ABX. In fact, gains are continuing today. Currently, the stock is trading at $23.14 per share after a gain of $0.74 per share, or 3.30%, as of yesterday.
We've Only Seen The Tip Of The Iceberg
If you think Barrick Gold is likely to start seeing declines, you might want to think again. The truth is that the stock is gearing up for more gains, and big gains at that.
As mentioned above, gold is a safe-haven investment, and when gold climbs, so, too, does ABX. At the moment, there are major uncertainties revolving around the global economy. Recently, the British people voted to leave the EU in a move that is being called Brexit. This action has tremendous economic implications for the world.
With the UK now leaving the EU, we are likely to see economic hardships in both regions as they move through the transition. Because these are two of the top five economies in the world, the effects of the Brexit are likely to radiate globally. The UK will need to renegotiate trade agreements with the world while the EU's economic instability will only get worse.
While this happens, we're likely to see more volatility in the global market. As conditions grow more and more concerning, the world's largest indices will continue to see increasing numbers of trading sessions in the red. All of this will happen while investors turn to gold as a way to protect their financial assets. At the end of the day, this will lead to continued growth in demand for and the price of gold, as well as continued growth in the value of ABX.
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