Gold stocks were the best performers Monday as the price of the precious metal jumped 2.4% in afternoon trading.
Gold futures rose as the dollar fell modestly and investors turned cautious. Bullion traded at $3,320.70 an ounce at 1:15 p.m. ET, according to FactSet.
A lower U.S. dollar makes it cheaper for investors abroad to buy gold. Meanwhile, gold appeared to be gaining as a safe-haven asset. Those are some of the same reasons why gold has climbed throughout this year. U.S. stocks fell ahead of the Federal Reserve's policy decision on Wednesday. Tariff uncertainties resurfaced after President Donald Trump threatened a 100% tariff on foreign-produced movies.
SPDR Gold Shares, the ETF that tracks spot gold prices, is rebounding after falling 1.6% last week and 2.3% the past two weeks.
IBD's gold and silver mining industry group was up 1.3%, among the top 10 industry groups for the day. It ranks No. 1 out of 197 groups. Some of the biggest gains came from lower-priced stocks in the group.
Gold Fields rose more than 7% and is finding support in a new pullback to the 10-week moving average. The South African mining company has a 99 Composite Rating. The company on Sunday agreed to acquire Australia's Gold Road Resources in a $2.4 billion deal.
DRDGold, another South African miner, also is getting support at the 10-week line. Its Composite score is also 99.
Gold Stock Near Buy Point
Skeena Resources is in the buy range from a breakout last month at an 11.30 buy point. The Canada-based miner has an 84 Composite Rating, below the desired 90.
Eldorado Gold climbed 2.5%. Eldorado, which has a 98 Composite Rating, is trading 3% above the 18.20 buy point of a handle entry it cleared April 11.
Alamos Gold, however, gapped below the 50-day moving average on Thursday and remains below that important level. Its Composite Rating is 99.
Canaccord Genuity cut its price target on Eldorado and Alamos Monday, according to TheFly.com.
Newmont — one of the largest mining companies in the world, with operations in North America, Africa, Australia, Latin America, the Caribbean and Papua New Guinea — is forming a large cup-with-handle base. The buy point is 57.16 and its Composite Rating is 99. Shares were up 2.5% Monday afternoon.
Barrick Gold, another Canadian company, is trading 6% below the 19.89 buy point of a breakout April 11. It is at risk of triggering the 7% sell rule, although shares are holding above the 200-day moving average.
Barrick Gold stock has a 21-day average true range (ATR) of 4.43%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
There are exceptions, but given current market conditions, IBD generally suggests investors keep most of their portfolio focused on stocks with ATRs at or below 6%. Newmont has an ATR of 4.72%, Eldorado 5.12%, Gold Fields 5.7% and DRDGold 6%.
