Goldcorp Upgraded By Multiple Brokers
It is important to know what factors to look for if you are a binary option trader of either Gold or Goldcorp (GG) stock. The main factors influencing the gold price include buying power, currency values, gold supply/demand, speculators and current events. However, there are also other factors to consider before taking a position on Goldcorp stock.
For example, what will become of interest rates in the short term? Many folks mistakenly believe that rising interest rates are invariably bad for gold. This isn’t necessarily true. Throughout President Obama’s terms in office, interest rates were near zero, but there was tremendous fluctuation in the gold price. This bucks the current thinking that interest rate hikes generate lower demand for gold.
Typically, a rate hike would mean the USD would strengthen, and this is where gold price and gold demand are affected.
Internal Dynamics of GG More Important Than the Gold Price Alone
The stronger the USD, the more gold that can be purchased, but this also leads to lower gold prices. There is an alternative perspective that states that a strong USD is a disincentive to foreign buyers of gold and this naturally leads to a decline in demand and prices. Central banks also have a big pot to play in gold demand and prices. Central banks stabilize the economy by buying gold for quantitative easing and selling gold for quantitative tightening. These are some of the strongest tools available in the central banks arsenal. Throughout it all though, it’s investor confidence that will make or break the gold price.
Index funds and mutual funds are the leading barometers of investor confidence on Wall Street. Most investors will focus their attention on huge funds like ETFs rather than individual gold stocks. The gold price does not necessarily determine the profitability of a gold-mining company like GG. The scale of operations, the financial management of the company, the investments, the richness of the resources and deposits and the economies of scale that a major company can maintain are far more important to the profitability of a company than the gold price alone. GG has a superb management team in place, and they have been strategically positioned for success.
Which companies are going long on Goldcorp stock?
As a binary options trader, it’s important to keep your finger on the pulse at all times. You want to be sure that you have the latest information about how other analysts and marketmakers perceive stocks that you’re interested in trading. For example, Goldcorp, has been upgraded from a hold rating to a buy, by TD Securities based on their perception of tremendous upside potential for the company.
GG has put into place many successful strategies to turn the company’s fortunes around. While there are better individual gold stocks to buy such as Newmont and Barrick, the long-term prognosis for Goldcorp is certainly positive. In 2016, Desjardins upgraded Goldcorp stock to a buy, while Deutsche Bank upgraded the stock to a hold.
These are all positive signs for Q1 2017, and the performance of the company is certainly reflective of this sentiment. As a binary options trader, you will want to keep your eye on negative economic data releases and any signs of a slowdown or reversal on Wall Street. This will boost gold demand and that bodes well for Goldcorp stock.
Disclosure: None.
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