- Hycroft Mining stock closes nearly 2% higher on Thursday.
- HYMC stock is still not a play on gold despite what supporters claim.
- Hycroft Mining still trending lower as momentum and social media interest fades.
Hycroft Mining (HYMC) stock did manage a small recovery on Thursday, but the overall trend remains lower. HYMC stock spiked into interest following the investment by AMC in March but since then has struggled in the face of falling momentum. The stock closed at $1.57 on Thursday, having spiked to over $3 in March.
HYMC Stock News
We must emphasize that this is not a proxy gold investment despite what some are trying to promote on social media. Hycroft has a very difficult mine, which means that extracting gold has been prohibitively expensive. Now however after the investment by AMC and the subsequent capital raise, HYMC does have the capital to commence production. Gold resources are proven at the site, but the economic cost makes it less profitable than other mines. Now with gold prices at 10-year highs, extraction looks more commercially attractive. Our chart below overlaps the gold price on HYMC stock and shows the lack of correlation between the two. In fact, by coincidence, they are almost negatively correlated.
HYMC vs. Gold chart, weekly
HYMC Stock Forecast
HYMC has certainly benefitted from the AMC investment and capital raise. It now has cash to survive and even perhaps thrive, but this is an early stage. The company has even admitted so itself.
"You never say 'never' in our industry. We've got a very long project with a lot of work to do, but for right now, we've got sufficient cash to get us plenty of runway down the road to be able to do the work we need to do, which is exploration and finalizing our technical studies for the larger commercial scale operation," said CEO Diane Garrett.
In our view the stock is too high. It still has too much of a speculation premium built in from the AMC frenzy.
HYMC stock chart, daily
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.