With recession fears rising, it could finally be the perfect time for this gold stock. Royal Gold (RGLD) has staged an impressive breakout as investors flood into the mercurial commodity sector.
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The firm acquires and manages precious metal stream and royalty interests, with a primary focus on gold. Around 73% of its total revenue comes from gold, with a further 11% from silver, 12% from copper and 4% from other minerals.
Royal Gold Stock Analysis
Denver-based Royal Gold is trading in a buy zone after breaking out from a cup-with-handle base. The ideal entry here is 131.99 and the buy zone runs as high as 138.59.
This is a first-stage base. IBD research has found that early stage patterns are more likely to result in rich gains for investors.
The relative strength line has been spiking as it moved toward the buy point, a bullish sign.
Recent volume looks encouraging, with a big spike as the stock retook the key 10-week moving average this week.
Its lofty “A-” Accumulation/Distribution Rating tells us institutions have been heavy buyers of late. In total, 66% of its stock is held by funds.
Overall performance is strong, with an IBD Composite Rating of 89 out of 99. It is also among the top 10% of stocks in terms of price performance over the past 12 months.
Future prospects look good, which should bolster earnings. Gold futures recently moved above the $2,000 per ounce barrier for the first time since 2020.
Genesis Gold Group predicts that gold prices will close out 2023 as high as $2,250, citing a multitude of factors, including higher interest rates and inflation, and faltering confidence in real estate.
Shrewd RGLD Has ‘Excellent’ Potential
CFRA gold stock analyst Matthew Miller touted shrewd moves made by Royal Gold management in an April 1 research note.
“RGLD has a strong portfolio of assets with excellent growth potential, long reserve lives, and minimal geopolitical risk.” he said. “RGLD has been opportunistic throughout the gold price cycle,
by adding additional streaming deals at attractive valuations (in our view).”
Miller rates the stock as a hold with a 134 price target.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more analysis of growth stocks.
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Source: https://www.investors.com/research/ibd-stock-analysis/gold-stock-royal-looks-set-to-shine-as-it-breaks-out-amid-rising-prices/?src=A00220&yptr=yahoo