Goldcorp Inc. (NYSE: GG) is one of the best gold stocks to buy this year, with returns expected to be as high as 60.7% by May 2018.
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The company’s profit margin is projected to grow significantly as gold prices keep rebounding from their recent $1,216 low on May 9.
You see, although gold is up 9.1% to $1,256 year to date, it cratered 6% from $1,294 on April 18 to $1,216 on May 9. Today, we’re going to go over why gold prices were down recently and why they’re poised to rebound 11.5% from their current price to $1,400 by the end of the year. Then, we’ll get into why GG stock is the best gold investment of 2017.
Here’s everything you need to know about the price of gold in 2017…
Why Gold Will Rebound from the Recent Drop
There was one big reason behind the sharp decline: the outcome of the French presidential election.
On May 7, centrist candidate Emmanuel Macron won the second and final round of the race over right-wing candidate Marine Le Pen. Macron secured a big lead over Le Pen during most of the election, which reassured investors there would be no market volatility.
The general consensus was that a Le Pen win would result in France pulling out of the European Union (EU). As one of the biggest economies in the EU, a French exit – or “Frexit” – would likely lead to market sell-offs around the world. The same happened with the Brexit, which caused a 4.8% sell-off in the Dow Jones over the two sessions following the vote on June 23, 2016.
But Macron’s victory meant no market volatility. Sincegold often gets a boost when the stock market drops, it instead dropped to a two-month low of $1,216 on May 9.
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As you can see, though, gold has already rebounded 3.3% from that low. This indicates how any dip in prices will likely just be a short-term pullback.
That’s why Money MorningResource Specialist Peter Krauth predicts we’re going to see the price of gold hit $1,400 an ounce by year’s end. That would be a gain of 11.5% from today’s price. Beyond that, the metal will continue to rally over the long term thanks to its continued appeal as a safe-haven investment.