2 Gold Mining Stocks That Could Explode Under Trump's Tariffs
Despite ebbing recession fears and a resilient labor market, gold prices have gained traction due to President Trump’s tariffs on imported goods, giving a boost to gold mining stocks like Barrick Gold Corporation GOLD and Kinross Gold Corporation KGC. Should you consider investing in these gold mining stocks? Let’s see – Impact of Trump Tariffs 2.0 on StocksTrump recently imposed an additional 25% tariff on imports of base metals like aluminum and steel. Trump also announced plans to impose reciprocal tariffs and reshape trade relationships with several partners. Besides an additional 10% tariff on Chinese imports, the Trump administration planned but delayed a 25% tariff on products from Canada and Mexico.Tariffs have always harmed stocks. In 2018 and 2019, the S&P 500 consistently declined 5% on days when the Trump administration announced tariffs, per The Goldman Sachs Group, Inc. GS. For every 5% rise in U.S. tariffs, the S&P 500’s earnings per share are expected to decrease 1-2%, according to Goldman Sachs’ chief equity strategist David Kostin. Tariffs strengthen the dollar, adversely impacting S&P 500 companies as they earn some revenue abroad.Tariffs are expected to increase price pressures, leading to higher interest rates and an increase in bond yields. Higher bond yields, in turn, make stocks look less alluring. Gold Glitters, So Does Mining StocksUnlike stocks, tariffs bode well for gold prices. This is because, especially, the threat of reciprocal tariffs may escalate a trade war and disrupt global economic growth, increasing the demand for safe-haven assets like gold. Gold prices, therefore, soared to a record high above $2,900 an ounce on Monday, driven by Trump’s tariffs. Gold prices surged 44% last year and trounced the S&P 500’s return of 22%, per Blackrock Investment Institute. After all, central banks globally acquired more than 1,000 tonnes of gold in 2024. It’s been the third successive year of no less than 1,000 tonnes of gold purchases by central banks globally, according to the World Gold Council. Prominent banks like Goldman Sachs and Citigroup Inc. C raised the target price for gold to $3,000 an ounce by the end of the year. With the price of the yellow metal scaling upward, profit margins of gold mining stocks such as Barrick Gold and Kinross Gold are expected to improve, making them attractive investments.Barrick Gold – Gaining From Major Exploration ProgramsBarrick Gold is a major global gold mining company with operations in the United States. Barrick Gold’s tactical investments, including the Nevada joint venture with Newmont, solidify its position as a leading gold mining company with strong growth potential.Barrick Gold’s expected earnings growth for the current year is 46.4%. The $1.23 Zacks Consensus Estimate for GOLD’s earnings per share (EPS) is up 32.3% from a year ago.Image Source: Zacks Investment ResearchBrokers assume the GOLD stock will jump, raising the average short-term price target to $21.42 from the last closing price of $17.04 and setting the highest target at $27.86, an upside of 63.5%.Image Source: Zacks Investment ResearchKinross Gold – Gaining From Organic Development ProjectsKinross Gold explores gold mines and has major assets in the United States and Canada. Kinross Gold is advancing projects for a strong growth profile among top gold producers.Kinross Gold’s expected earnings growth for the current year is 65.9%. The 73 cents Zacks Consensus Estimate for KGC’s EPS is up 102.8% from a year ago.Image Source: Zacks Investment ResearchBrokers assume the KGC stock will jump, raising the average short-term price target to $12.54 from the last closing price of $11.87 and setting the highest target at $14.45, an upside of 21.7%.Image Source: Zacks Investment ResearchYou can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS): Free Stock Analysis Report Citigroup Inc. (C): Free Stock Analysis Report Kinross Gold Corporation (KGC): Free Stock Analysis Report Barrick Gold Corporation (GOLD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
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