John Feneck, portfolio manager and consultant at Feneck Consulting, shared his latest thoughts on the gold price, saying that after the second quarter’s record-setting levels miners should be due to share good results.
Pointing to Newmont (TSX:NGT,NYSE:NEM), Agnico Eagle Mines (TSX:AEM,NYSE:AEM) and Barrick Gold (TSX:ABX,NYSEGOLD), the three biggest holdings in the VanEck Gold Miners ETF (ARCA:GDX), he said he expects strength.
‘What’s different this time around for these three companies, and other gold producers, is that they’ve been able to clip a really nice margin on what their costs are vs. what the current price of gold is,’ he said.
While the broad market remains focused on tech, Feneck believes that may start to change.
‘I think value managers are going to start to see these stocks in the large-cap gold space start to do much better, and it’ll catch their attention later as the year progresses,’ he explained, emphasizing that the shift won’t be immediate.
‘Will it be an all-in kind of event? No. What we’re going to need to see in our view is the broad market start to pull back, and that will create what we call a sector rotation into some safer havens like a Newmont or an Agnico.’
Feneck also gave overviews of a variety of small-cap resource stocks he’s watching.
Precious metals stocks on his radar at the moment include First Nordic Metals (TSXV:FNM,OTCQB:FNMCF), NevGold (TSXV:NAU,OTCQX:NAUFF) and Guanajuato Silver (TSXV:GSVR,OTCQX:GSVRF).
Feneck is also interested in ‘special situation’ companies with different ideas or exposure to lesser-known commodities. Examples include Golden Metal Resources (LSE:GMET,OTCQX:GMTLF), Fireweed Metals (TSXV:FWZ,OTCQX:FWEDF), First Tellurium (CSE:FTEL,OTCQB:FSTTF) and Angkor Resources (TSXV:ANK,OTCQB:ANKOF).
Moving over to uranium, Feneck remains bullish and is interested in juniors. He mentioned Forum Energy (TSXV:FMC,OTCQB:FDCFF) and F3 Uranium (TSXV:FUU,OTCQB:FUUFF) as companies on his list.
Watch the interview above for more from Feneck on the resource sector and the companies he’s eyeing.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.