The gold production space is a tricky one for new investors to maneuver.
It seems stock prices in the precious metal space often don’t do what they’re “supposed” to do, making this an extremely frustrating sector to contend with. This has been the case with Agnico Eagle Mines (TSX:AEM), one of the largest and most well-known mining companies on the Toronto Stock Exchange (TSX).
Agnico Eagle is a tough company to grapple with, for a few reasons. This miner is one of the top five TSX listed miners by size, or number of ounces produced. However, the company has sent out contradictory information to financial markets, relating to lower production guidance and idling production signals.
The company stated that while each ounce mixed may indeed produce a higher unit profit, the company’s overall absolute net profit at the end of the year may not increase on a year over year basis, to the chagrin of many.
That said, my take on gold production right now is that once we do pass the stage of the coronavirus outbreak and folks are invited to go back to work, medium-term profitability for mining companies like Agnico Eagle should absolutely explode.
The price of gold should, in theory, continue on higher as governments continue to print money, the U.S. dollar weakens (mostly for this reason), and unemployment stays high due to the downward economic spiral which has just begun.
At these levels, I’d suggest all investors add Agnico Eagle and strongly consider such a company be added to portfolios in the near-term.
Invest wisely, my friends.