Palmer said as a fourth-generation miner, he knows the value of being a low-cost provider, and that's why Newmont operates as if gold is just $1,200 an ounce. He said being profitable and being able to pay a sustainable dividend at that low level gives the company a huge advantage in the market.
When asked about the effects of Covid--19, Palmer explained that Newmont put five mines into care-and-maintenance mode during the quarter, but is now working to return those mines to regular operations.
Let's check and see if the charts and indicators need any maintenance.
In the daily bar chart of NEM, below, we can see that the stock rallied into early March and then corrected for about a week as the world markets collapsed. NEM tested the rising 200-day moving average line without making two consecutive closes below it. The rally quickly resumed and by early April prices had broken out to new highs.
The On-Balance-Volume (OBV) line has risen steadily into the middle of May telling us that buyers of NEM have been more aggressive. Prices have corrected from late May to break below the rising 50-day moving average line. The OBV line has weakened and the Moving Average Convergence Divergence (MACD) oscillator has broken below the zero line for an outright sell signal.
In the weekly bar chart of NEM, below, we went back five years to show the large consolidation pattern that the stock broke out of this year. This large consolidation pattern can support a large rise. NEM has doubled from the pattern and a triple or more is possible. Prices are above the rising 40-week moving average line even with the recent pullback.
The weekly OBV line has been rising for the past year telling us that investors have been aggressive buyers. The weekly MACD oscillator turned bullish in the middle of last year and recently signaled a take profits sell message.
In this first Point and Figure chart of NEM, below, we used daily price data. Here the software is projecting a potential upside price target in the $74 area.
In this weekly close-only Point and Figure chart of NEM, below, we can see a potential longer-term price target of $123. This kind of price target would mean that gold prices rise significantly.
In this daily Point and Figure chart of a "continuous futures contract" of Gold, below, we can see a potential upside price target of $2,039 which would be a new all-time high.
Bottom-line strategy: Aggressive traders could go long NEM at current levels risking a close below $50. Not so aggressive traders could go long NEM on a close above $60 risking a close below $55. Our first price target is $74.