Image: Anzá gold exploration project in Colombia Source: Mining
The investment thesis for Newmont (NYSE:NEM), the world’s largest gold producer, has remained the same for many years. NEM is an excellent long-term investment on account of its impressive balance sheet and, more specifically, its stable long-term production outlook.
However, I still believe it is essential to trade short term about 40% of your NEM position to profit fully from the sector volatility. Using TA patterns and RSI is recommended.
I believe it is about time to look at Newmont Corporation again, for three critical factors.
1 – Gold is at a new record high of $1,922 per ounce in Q3 ’20
We have already started the fourth quarter of 2020, and it is time to analyze the future third-quarter results and discuss what we should reasonably expect. We know that the gold price for the third quarter has reached another record high of $1,922 per ounce, nearly $200 per ounce above the price received by the company in the second quarter of $1,724 per ounce.
I recommend reading my article about the second-quarter results published on August 10, 2020.
2 – The gold price is now temporarily trending down
The gold price has shown signs of technical exhaustion after reaching an all-time high of $2,069.21 on August 6, 2020.
However, the World Gold Council (“WGC”) cautions that while the price of gold reached all-time highs in nominal terms, it remains below the inflation-adjusted record of $2,800 an ounce.
I have been warning readers on Seeking Alpha for quite some time about a potential retracement after gold reached $2,070 per ounce based on the 10-year chart pattern (adjusted for inflation).
The TA pattern is relatively straightforward. The pattern is called a Cup and Handle. We are