Renk in a SUPERCYCLE! Elon Musk wants gold! USD 3,500 an ounce? Barrick off to a good start, but Globex Mining does better!

Globex Mining: Rising prices driven by momentum and news

Anyone who has bet on the Globex Mining share since the beginning of the year is now up around 25%. This is arguably one of the most risk-diversified stocks in the commodities sector. The mining incubator offers broad diversification in the commodities universe with over 250 projects. About half of the projects are in the precious metals gold, silver, platinum or palladium. However, the Company is also active in rare earths, such as lithium and hydrogen. Globex does not finance the exploration itself but provides the properties to others. In return, it receives stock options and royalty payments, among other benefits.

Another advantage for Globex shareholders is the continuous news flow resulting from the large number of projects. Exploration companies often go months without providing updates on their projects. However, Globex can report on exploration successes and royalty payments from its portfolio almost weekly. Most recently, Emperor Metals provided an update. At the gold project in Quebec, Canada, the results of 19 drill holes totaling 8,166 meters were published. With intercepts such as 43.9 m at 0.74 g/t Au (gold) in previously unsampled historical cores and 2.5 m at 8.62 g/t Au, the Company is increasingly optimistic that it will be able to expand the resource by exploring new zones. This could increase the potential open-pit mine in terms of surface area and depth. Brunswick Exploration and Radisson Mining Resources also provided positive exploration news. Globex is involved in these gold projects through royalties.

Thus, the Globex Mining share continues to offer a low-risk opportunity to participate in the gold boom. If Bank of America has its way, the rally in the precious metal will continue for some time.

Barrick Gold and Elon Musk: Conspiracy theory and gold price reaching USD 3,500

Elon Musk has previously focused more on cryptocurrencies than on gold. However, this has changed in recent days. On his social network, he joined the discussion about whether gold is actually stored in the famous Fort Knox. A popular conspiracy theory is that the alleged US gold reserves are significantly smaller or do not even exist. Whether Musk's comments triggered the gold price's recent jump above the USD 2,900 mark is unclear. What is certain is that gold is gaining significant momentum. Now, Bank of America has even mentioned a target price of USD 3,500. The drivers are well-known: geopolitical risks, inflation, uncertainty surrounding Trump, and purchases by China and other central banks. Goldman Sachs had already raised its target price for gold. They expect the precious metal to reach USD 3,100 by the end of 2025 – up from the previous forecast of USD 2,890. Goldman even suggests the price could go as high as USD 3,300 if the US imposes tariffs on gold.

In any case, there currently seem to be enough drivers for a rising gold price. Even Barrick Gold is now benefiting from this trend. The stock of the ailing industry heavyweight has gained over 16% in the space of a month. At over USD 18, Barrick's shares are back above the 200-day line. However, there has been no significant positive news. The motto seems to be "all bad things are already priced in". Barrick has temporarily removed its Mali mine project from its plans, which will lead to a significant decrease in annual production. Additionally, the announcement of possibly relocating the Company's headquarters to the US is not exactly a catalyst for the stock price. This suggests that the recent share price performance is not based on positive events. Moreover, the long-term downward trend that began in September 2020 remains intact. Therefore, a stock like Globex Mining seems more interesting. It is in an upward trend, has a risk-diversified business model, and positive news flow.

Renk: Heading for an all-time high!

Like Globex Mining, Renk's shares are also being driven by positive news from the Company and industry. However, the transmission specialist's market capitalization is now a proud EUR 3 billion. The downward trend and resistance were finally broken with the jump from around EUR 22 to around EUR 30. This brings the all-time high of over EUR 37 into focus.

The analysts at Warburg believe that the armaments share can move in this direction. In their initial study, they see Renk in a supercycle. Although the growth targets are ambitious, the Company has so far delivered what it promised. Therefore, they are starting coverage with a "Buy" recommendation and a price target of EUR 36. This makes the Warburg analysts one of Renk's bulls. The average target price is EUR 31.60.

Defense and gold have a lot of momentum right now. It is certainly too early to talk about a turnaround at Barrick, as the Company's problems are far from resolved. In contrast, Globex Mining has a strong case for rising prices, particularly with its diversified risk model. Renk and other defense stocks have certainly heated up, but they may well continue to go up. It will be interesting to see what happens to defense stocks after the war in Ukraine ends, even though high NATO investments will likely fuel the sector in the coming years.