Newmont stock (NYSE: NEM) increased 7% in just the last one week (five trading days) and currently trades at $65. The stock outperformed the market (S&P 500) which went up 1% and also its closest rival Barrick Gold which was up 5%. The rally was driven by strengthening of the global gold prices. Gold prices had fallen from around $1,950/ounce at the beginning of 2021 to less than $1,700/ounce toward the end of March 2021, due to expectations of a strong dollar, higher interest rates, and faster economic recovery amidst a successful vaccine rollout. But the recent spike in Covid cases in major economies have led to fears of the second wave being worse that the first. This has led to some recent weakness in the dollar, with investors feeling that re-imposition of lockdowns will delay the economic recovery. Also, loose monetary policy across major economies is expected to continue which would keep interest rates subdued, thus making the yellow metal more lucrative. This has led to an uptick in global gold prices, which are up from less than $1,700/ounce in the beginning of April 2021 to $1,770/ounce as on 20th April 2021. Gold prices are up 2% in the last one week. This has benefited NEM stock as the company gets 94% of its revenue from the yellow metal.
Now, is NEM stock set to rise further or could we expect some correction? We believe that there is a 54% chance of a rise in NEM stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on NEM Stock Chances Of Rise for more details.
Five Day: NEM 7%, vs. S&P500 1.1%; Outperformed market
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- Here’s How The Recent Slide In Gold Prices Impacted Newmont Stock
(7% likelihood event)
- Newmont Mining stock rose 7.0% over a five-day trading period ending 4/19/2021, compared to broader market (S&P500) rise of 1.1%
- A change of 7% or more over five trading days is a 7% likelihood event, which has occurred 169 times out of 2516 in the last ten years
Ten Day: NEM 3.8%, vs. S&P500 2.3%; Outperformed market
(27% likelihood event)
- Newmont Mining stock rose 3.8% over the last ten trading days (two weeks), compared to the broader market (S&P500) rise of 2.3%
- A change of 3.8% or more over ten trading days is a 27% likelihood event, which has occurred 688 times out of 2511 in the last ten years
Twenty-One Day: NEM 4.2%, vs. S&P500 6.5%; Underperformed market
(32% likelihood event)
- Newmont Mining stock rose 4.2% the last 21 trading days (one month), compared to a broader market (S&P500) rise of 6.5%
- A change of 4.2% or more over 21 trading days is a 32% likelihood event, which has occurred 806 times out of 2500 in the last ten years
Out of 169 instances in the last ten years that Newmont Mining (NEM) stock saw a five-day rise of 7.0% or more, 92 of them resulted in NEM stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 92 out of 169, or about 54% chance of gain in NEM stock over the coming month.
While Newmont stock may have moved, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how the stock valuation for Compass Minerals vs Southwest Gas shows a disconnect with their relative operational growth. You can find many such discontinuous pairs here.