Stocks to Consider as Stock Market Collapsing
The people of Britain have voted to leave the European Union, shocking financial markets and the world at large. However, there some stocks to consider in this crisis, namely those in the mining industry.
Gold prices jumped 5.2% Friday morning, reaching $1,328.20 per ounce. They had spiked even higher the night before, peaking at $1,362.60 before tapering in the early morning hours. It was the highest level for gold prices since March 2014.
The surge in gold came, as always, in contrast to a sharp fall in equities. Europe’s Stoxx 600 was down 5.97% at the time of writing, while Germany’s Xetra DAX blue chip index crashed 6.19%. The worst of all? Italy’s Milan Stock Exchange fell 11.38%.
From a bird’s eye perspective, the stock market looks like a bad place to be. However, there are a few bright spots if you look closely enough. Here are five stocks to consider in the aftermath of the Brexit results. (Source: “Gold Soars as Investors Seek Haven Following Brexit,” The Wall Street Journal, June 24, 2016.)
1. Barrick Gold Corporation (NYSE:ABX)
Shares of Barrick jumped 5.06% on Friday morning as investors remembered why they love gold in the first place: it’s a safe haven in times of uncertainty. No one really knows what the implications of the Brexit are, so the rush to gold is only natural. As a side note, this miner has been on a steady climb since I first turned bullish on it at $7.41. It’s now sitting at $20.34—a gain of 174.49%.
2. Goldcorp Inc. (NYSE:GG)
Unsurprisingly, this rally in gold stocks spread far beyond Barrick. Shares of Goldcorp spiked 3.84% as well, adding to the stock’s impressive run in 2016. From the start of the year, GG stock has gained 58.22%.
3. Randgold Resources Ltd. (NASDAQ:GOLD)
One of the biggest winners of the day is definitely Randgold. GOLD stock surged 6.68% in just a handful of trading hours, bringing the firm’s year-to-date return all the way up to 63.25%.
4. First Majestic Silver Corp. (NYSE:AG)
Gold wasn’t the only metal that rose on Britain’s departure from the EU—silver prices increased 2.41%. The gain was more tepid because unlike gold, silver is an industrial metal. However, markets also view it as a store of value, hence the sudden surge. Shares of First Majestic were up 4.11% to $12.91. The company has had a stunningly impressive year with gains of up to 294.5% from the start of the year.
5. Coeur Mining Inc. (NYSE:CDE)
Coeur is another silver miner that has struck it big in 2016. The firm’s stock is climbing at an astounding rate, having appreciated by 299.6% since the start of the year. CDE stock jumped 4.32% after the Brexit results rolled in.
As global markets continue to tumble, stocks associated with safe haven metals are likely to continue their upward trajectory. Gold and silver miners will probably accrue enormous capital gains for their stockholders.