Why Is Newmont Stock Surging on Wednesday?

Newmont Corp. (NYSE:NEM) stock is surging on Wednesday, primarily driven by a jump in spot gold prices. Gold prices climbed more than 2% to reclaim the $4,000-an-ounce level on Wednesday, supported by a weaker U.S. dollar and falling Treasury yields after Democrats secured key victories in the U.S. midterm elections.

Markets interpreted the results as potentially increasing the likelihood of political gridlock in Washington and limiting prospects for further fiscal expansion. The dollar fell to a four-week low, while Treasury yields declined across the curve, boosting the appeal of non-yielding bullion, according to Trading Economics.

Broader Market Backdrop

Stock futures pointed higher before the open, with S&P 500 futures up 1.09% and Nasdaq futures up 0.38%, a firmer backdrop for cyclical and commodity-linked names.

Wall Street Consensus

Benzinga analyst consensus shows an overall Buy rating for Newmont based on 17 analysts. The ratings breakdown consists of 13 Buy, 3 Hold, and 1 Sell rating. The average analyst price forecast is $111.05, implying about 2.5% downside from the current share price.

Several brokerage firms updated their forecasts for Newmont in late October. Citigroup maintained a Buy rating on Oct. 20 while raising its forecast to $140. Freedom Broker downgraded the stock to Hold on Oct. 22, lowering its forecast to $116. Scotiabank reiterated a Sector Outperform rating on Oct. 27 while trimming its forecast to $148.

Technical Analysis

At $113.19, NEM is essentially flat versus its 20-day SMA ($113.63) and sitting just above its 20-day EMA ($113.13), which frames this area as a near-term "decision zone" for trend direction. The bigger tell is that the stock is still trading 5.4% below its 50-day SMA ($119.70), so bulls generally need follow-through to avoid this turning into another lower-high attempt.

The longer-term picture is less fragile than the short-term momentum read suggests, since the stock is trading 0.7% above its 200-day SMA ($112.38) and 2.0% above its 100-day SMA ($110.96). That aligns with the "golden cross" that occurred in September (50-day SMA above the 200-day SMA), even though the 20-day SMA remains below the 50-day SMA, keeping the near-term bias choppy.

• Key Resistance: $120.50 — a nearby ceiling that lines up closely with the 50-day SMA area where rebounds can stall
• Key Support: $110 — a round-number level sitting near the 100-day SMA zone that can act as a line-in-the-sand for dip buyers

NEM Stock Price Activity: Newmont shares are trading higher by 6.01% at $113.93 at the time of publication on Wednesday, according to Benzinga Pro data.

Image via Shutterstock