Evolution Mining Ltd (ASX: EVN) shares will be on watch today after the price of gold has recently increased. According to CNBC, the spot gold price is up 0.27% to US$1,478.14 having hit its highest since the 7th of November.
Evolution Mining Ltd shares on watch after the gold price projected to increase (Source: Carla Gittens)
The gold price has edged higher as uncertainty emerging from mixed messages on the U.S-China trade negotiations offset distractions from positive economic data out of the United States.
Quantitative Commodity Research analyst Peter Fertig stating the increased demand for gold and the U.S. president’s reticence regarding trade negotiations have gone hand in hand in increasing the gold price,
We’re seeing safe haven demand for gold, as long as (U.S. President Donald) Trump does not make a clear statement about what he wants - said Fertig.
Furthermore, despite recent increases in the gold price, sentiment towards EVN stocks have been sharply increasing after Citigroup upgraded Evolution Mining to “buy” from “neutral” signal. This change came after the miner announced the US$375 million acquisition of the Red Lake gold complex in Canada from Newmont Goldcorp Corporation.
Commenting on the Red Lake Transaction, Evolution’s Executive Chairman, Jake Klein, said;
Evolution is excited to be adding Red Lake to its portfolio, providing the Company with a high-grade, long life gold mine in Canada. We have been actively looking at assets in Canada since 2017 as we believe it is a country with low geopolitical risk, high geological perspectivity and a strong mining culture.
When determining whether to invest or not in Evolution Mining Ltd shares, the negative trend in the share’s prices, decreasing 23% in the last quarter, and 5% since the announcement of their acquisition of Red Lake gold complex on the 26th of November last month will undeniably present arguments to the contrary. However, the stock is definitely one to watch in the upcoming days given projected increase in gold prices globally and the positive affect this will inflict on EVN shares.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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