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Why Did Gold Stocks Jump This Week?

Should Gold Stocks Be On Your List Right Now?
The post Why Did Gold Stocks Jump This Week? appeared first on Gold Stocks to Buy, Picks, News and Information | GoldStocks.com.

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All throughout 2020, gold as a metal has gone up in price quite a lot. Early in the year the precious metal even reached above $2,000 per ounce. So why have gold stocks been able to go up so much? Well part of this is the fall of the price of the dollar due to the state of the economy. Continued government stimulus that has been given to Americans, businesses, and more hurt the price of the dollar. This brings the price of gold stocks up. In general the economy has been horrible this year, which in turn brings the price of gold up too. This is because investors will hold gold as a physical asset rather than the dollar in times where the dollar keeps going down.

Recently gold stocks had an uptick because of the entire stock market going up on one day too. So there are many factors that impact which direction that gold stocks and other mining stocks will move. It is important to conduct the best research possible if you are investing a sizable amount of money in the sector. Some look at gold stocks and think that you can simply invest based on recent news. While recent news does play a factor into investing, there are many other factors as well. These include looking at the volume of a gold stock, as well as other news pieces that may affect the price like jobless reports. Let’s dive into the recent reasons that gold stocks as a whole have received an uptick.

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Stimulus Deadline Approaches, Gold Stocks Go Up

Currently, there is a $908 billion bill being proposed in the Senate that is under strong debate between both sides. The government is at a very real risk of shutting down if this is not resolved. The House passed a two-day continuing resolution for the senate in the meantime. This means some kind of bill must be agreed on in this time or the government will shut down. The negotiations continue for COVID relief stimulus, which could potentially go any way. Some want stimulus checks given to Americans of $1,200, while others don’t want any stimulus checks at all to focus on businesses and vaccine distribution. Once this stimulus bill is passed, it could have a positive effect on gold stocks.

Because of this continued news going on, the price of gold has moved up. As of December 18th, the price of gold has pushed above $1,850. Gold’s current price is at $1,881 as of the end of the day on Friday. Unfortunately there is no final agreement for the bill yet. Senate Majority Leader Mitch McConnell stated, “I believe all sides feel we’re making good progress on a major relief bill… But, alas, we are not there yet. But, alas, we are not there yet”. It will be interesting to see how this will affect the price of gold and gold stocks.

The Future Of Gold Stocks

Gold reaching a new record high at $2,075 back in August was impressive, but could the yellow metal move higher in 2021? The economy could potentially take off once a vaccine is widely distributed and presumably works. But this is an optimistic opinion that implies that all of this will come true. That is why gold prices could truly move in any direction which is why this sector is so volatile at the moment. Economic recovery will bring the price of gold stocks down, but how quick can that even happen? Just because a vaccine has been effective, does not mean that the economy will instantly recover. A lot of damage has been done to the economy that will take a period of time to fully recover from. You saw how long it took for many to recover after the financial crisis back in 2007-2008.

[Read More] Gold Stocks For Your December 2020 Watch List

This is economic damage on a whole other level because of what was caused. With that being said, that does not mean there are not many gold stocks to watch. Gold companies will be reported much higher numbers if prices relatively stay the same and mining operations open up even more. Some analysts think that gold prices could reach above $2,200 in 2021. But this is a very optimistic outlook. What could be more realistic, is the price of gold reaching above $1,900 and maybe $2,000 if this stimulus bill does enough damage to the dollar. Gold stocks will additionally be impacted by the inauguration in January, because who knows what will happen when President-elect Biden takes office. For now, keep your eye on the market and conduct the best research possible when looking to invest in gold stocks.

The post Why Did Gold Stocks Jump This Week? appeared first on Gold Stocks to Buy, Picks, News and Information | GoldStocks.com.

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