During times where the economy is not performing well, gold penny stocks often prevail in the market. This was especially true in 2020 when the pandemic caused the dollar to collapse. As a result, gold reached a new record high price per ounce. This created a lot of hype for gold stocks and brought a lot of new investors to the sector.
Gold stocks generally follow the VanEck Vectors Gold Miners ETF (GDX). This ETF has not had the greatest performance in the last year, provided about a -17% return. This has occurred because of economic recovery caused by the slowing down of the pandemic. Despite this, gold prices remain very high at the moment and have not dramatically gone down in price in a long time.
When investing in gold penny stocks, things can get very risky. Penny stocks are defined as those that trade under $5 per share. Because of their low cost, they can make large percentage gains or losses in a single trading day. So while a blue-chip gold stock may not be affected very much by a $1 price change, these assets would be. That is why developing an investment strategy that works for you is essential in the process. Many investors will set a stop-loss amount when trading gold penny stocks. This means that if a gold penny stock goes below a certain price, your shares will be sold. Even looking at the latest news can help when investing in the gold sector. With all of this in mind, let’s look at three gold penny stocks that have potential in August.Gold Penny Stocks to Watch
- Golden Star Resources Ltd. (NYSE: GSS)
- Gold Resource Corporation (NYSE: GORO)
- Paramount Gold Nevada Corp. (NYSE: PZG)
Golden Star Resources Ltd. is a gold penny stock that explores for gold in Canada at various mineral properties. It actively runs the Wassa open-pit gold mine in Tarkwa, Ghana. Additionally, it owns processing plants and underground mines. It also holds interest in multiple gold-related projects in both Ghana and Brazil.
On July 28th, Golden Star Resources reported its results for the three and six months ended June 30th. The CEO of the company, Andrew Wray said, “Our primary objectives for H1 2021 were to continue positioning the business for future production growth, as well as to be able to address the repayment of the $51.5m Convertible Debentures in August 2021. With the increase in the cash position to $72.7m during the quarter and the successful refinancing of the Macquarie Credit Facility, we now have adequate liquidity to be able to cash settle the Convertible Debentures on maturity.” GSS stock was at $2.09 per share just a few days ago. Now on July 30th, GSS stock is worth about $2.60 per share on average. Will you add GSS to your list of gold penny stocks to watch?Gold Resource Corporation (NYSE: GORO)
Gold Resource Corporation is a mining penny stock that engages in the exploration, development, production, and sale of gold. It also searches for minerals like silver, copper, lead, and zinc at various deposits. Its operations are run in the US and Mexico. Primarily, Gold Resource Corporation focuses on the Aguila project holding 18 mining concessions on a total 24,000 hectares in Mexico.
On July 27th, Gold Resource Corporation released its recent financial results. The company reported strong revenue of $30.8 million and an operating cash flow of $16.1 million. Gold Resource’s filtration plant and dry stack are expected to be in line with its budget and delivered in the third quarter of 2021.
The President and CEO of the company, Allen Palmiere said, “Gold production in the second quarter was as expected while silver and base metal production were modestly behind forecast as the team continues to address challenging ground conditions. Accordingly, our all-in sustaining cost per ounce were higher than our guidance at $1280 per ounce of gold equivalent. Notwithstanding this we reinvested $11.2 million into exploration and infrastructure improvements at the Don David Gold Mine and ended the quarter with a cash balance of $30.5 million effective June 30, 2021.” With this recent report in mind, will GORO enter your gold penny stock watchlist?Paramount Gold Nevada Corp. (NYSE: PZG)
Paramount Gold Nevada Corp. is a gold penny stock that acquires land, explores, and develops precious metal properties. Its properties are all located in the United States in Nevada and Oregon. It holds interest in the Sleeper gold project and the Grassy Mountain gold project. Together these projects have more than 2700 unpatented claims.
[Read More] Top Mining Stocks To Watch In Mid July
When July 20th came around, Paramount Gold was granted a conditional use permit extension from Malheur County. This is to begin the construction at its proposed Grassy Mountain underground gold mine. The Malheur County Planning Commission granted a two-year extension through May 2023 on said permit.
The CEO Rachel Goldman said, “We are encouraged by the ongoing support from Malheur County and the broader community as we continue in our efforts to advance Grassy Mountain into production, and we look forward to building a modern mine that will benefit all of our stakeholders.” Noting this latest advancement, will PZG enter your list of gold penny stocks to watch?Current Climate of Gold Penny Stocks
Gold penny stocks will always remain rather volatile assets. Penny stocks are often unpredictable and can move up or down in price based on little to no news. Right now the pandemic is still affecting gold stocks for both good and bad. There are also many fears of inflation in the market at the moment as well. With all of this to keep in mind, which gold penny stocks will you add to your watchlist before August 2021 arrives?