How to Trade Newmont Shares: NEM Stock Trading Guide

If you're considering trading Newmont (NEM) shares, it's worthwhile to take the time to read up on its history and trading dynamics, whether you invest in shares directly or trade CFDs.

This guide highlights popular elements that traders focus on, including both fundamental and technical analysis, along with market sentiment insights, to support better informed CFD trading choices. Let's dive in!

TL;DR

• Company Background: Newmont Corporation, founded in 1921 and headquartered in Colorado, is the world's largest gold mining company (as of 2024). It has extensive global operations and interests in multiple metals, including gold, copper, and silver.
• Stock Price Influences: Newmont's stock price has been historically influenced by gold price fluctuations, economic cycles, and investor sentiment, making it sensitive to broader macroeconomic trends.
• Trading Options: Newmont shares can be traded traditionally on stock exchanges or via Contracts for Difference (CFDs), allowing traders to trade on rising and falling prices without owning the shares.
• Analysis for CFD Traders: Popular analysis toola for trading Newmont CFDs include (among others) fundamental, technical, and sentiment analysis. Each provides unique insights into price trends and helps traders make better informed decisions.

What Is Newmont?

Newmont Corporation is a leading global gold (XAU) mining company headquartered in Colorado. Founded in 1921, Newmont operates across several continents, with active gold mines in the Americas, Australia, and Africa. The corporation's diverse portfolio also includes mining interests in copper, silver, zinc, and lead commodities.

Interestingly, Newmont's acquisition of Goldcorp in 2019 solidified its position as the world's largest gold producer, and in 2023, it acquired Newcrest Mining, further expanding its global footprint.

Over the decades, Newmont has experienced significant growth, notably surviving hostile takeover attempts in the 1980s. The company divested its copper, oil (CL), gas, and coal interests to focus primarily on gold. This restructuring led to the establishment of Newmont as a unified gold producer.

Moreover, Newmont cemented its place as the largest gold producer worldwide. Today, Newmont remains a key player in the global mining sector, emphasising sustainable practices and contributions to local economies.

Newmont Stock Price History

Newmont Corporation's stock price history reflects both the company's operational milestones and broader macroeconomic trends in the mining and commodities sectors.

Historically, traders may want to note that Newmont's stock performance has responded to volatility in gold prices, economic cycles, and shifting investor sentiment towards safe-haven assets. Key historical trends reveal how Newmont's stock price has evolved in alignment with economic cycles and industry-specific changes.

In the early 2000s, Newmont saw steady growth, particularly between 2003 and 2006, where prices surged alongside rising gold demand driven by geopolitical tensions and increasing inflation concerns. Furthermore, the 2008 global financial crisis created market volatility, prompting investors to seek safe assets like gold. This led to a boost in gold mining stocks, and Newmont's stock rose by over 17% in 2009. As economic uncertainty persisted, gold prices remained high, contributing to Newmont's robust performance in the following years.

From 2010 to 2013, Newmont's stock price continued to benefit from high gold prices, although the rally eventually slowed as global markets began to recover. By 2013, the firm's share value declined by nearly half, mainly due to a drop in gold prices amid renewed economic health worldwide and reduced demand for safe assets.

The company's stock price surged again in 2020, achieving a 40% gain. The COVID-19 pandemic triggered another rush to gold as a hedge against economic instability, and Newmont's stock reached new highs as gold became an attractive asset during this period of global uncertainty.

In recent years, macroeconomic challenges such as inflation and supply chain disruptions have created fluctuating investor sentiment. The increase in Newmont's stock price in 2024 reflects ongoing interest in gold amidst economic uncertainties, demonstrating the corporation's resilience and relevance in the face of macroeconomic shifts.

How Are Newmont Shares Traded?

Newmont shares can be traded on traditional stock exchanges, and interested traders also have the option of getting exposure to price movements via Contracts for Difference (CFDs).

CFD trading allows you to trade on the ups and downs of Newmont's share price without the rights or responsibilities that come with owning the underlying share. Leverage, a key component of this trading arena, makes it possible to open positions with a relatively lower level of starting capital but also increases the potential amount that can be lost.

Factors Affecting Newmont's Share Price

Understanding the inputs that can shift Newmont's share price is crucial for traditional stock traders and those who choose the CFD arena alike. Let's look at a few of these:

• Gold and Commodity Prices: Newmont's share price is susceptible to fluctuations in the prices of gold and other essential commodities like silver (XAG) and copper (HG). As a leading gold producer, Newmont benefits directly from rising gold prices, which could boost its earnings and stock performance.
• Operational Efficiency and Cash Flow: Newmont's ability to maintain strong free cash flow and operational efficiency is crucial for its profitability. High free cash flow could make the stock more attractive, supporting higher valuations and potential price appreciation.
• Market Sentiment and Technical Indicators: Technical chart patterns and analyst sentiment, such as moving averages and bullish targets, may drive interest in Newmont's stock. Positive technical indicators could signal an upward trend, attracting investors and potentially increasing share prices.
• Macroeconomic Environment: Broad economic factors play a significant role, including potential interest rate changes and overall demand for commodities. If rate cuts stimulate commodity demand, this could create a supportive environment for Newmont's stock, given its reliance on strong demand for precious metals.

Analysing Newmont Shares as a CFD Trader

Traders generally use three methods when analysing shares: fundamental, technical, and sentimental. Let's look at some key aspects of each of these:

Fundamental Analysis

• Financial Statements and Key Metrics: With each quarterly earnings release, review Newmont's financial statements to assess its stability. Metrics such as earnings per share (EPS) and profit margin can reveal the company's profitability and financial health.
• Performance Ratios: Analyse ratios like return on equity (ROE) and profit margin to evaluate Newmont's operational efficiency and potential for sustained growth.
• Industry and Economic Factors: Consider broader industry trends, such as commodity price shifts, regulatory changes in mining, and global demand for gold and other metals. Economic conditions influencing mining and investment should also be factored into Newmont's valuation.

Technical Analysis

• Price Movement Trends: Examine Newmont's historical price data to spot any trends that suggest future movement.
• Trading Volume Signals: A surge in trading volume alongside price changes may validate trend strength or signal a reversal, providing valuable insights for CFD trading strategies.
• Technical Indicators: Use indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) to identify whether Newmont's stock is experiencing overbought or oversold conditions, indicating possible trend shifts.
• Support and Resistance Zones: Identify support and resistance levels to help guide entry and exit points and improve risk management by setting effective stop-loss limits.

Sentiment Analysis

• News and Announcements: Follow economic news related to Newmont, such as policy updates, acquisitions, or shifts in commodity prices. These financial events can rapidly impact market sentiment.
• Macro Market Trends: Consider larger economic signals, such as global market trends in demand for metals or shifts in mining regulations, as these can influence perceptions of Newmont.
• Investor Sentiment: Account for the psychological factors that drive investor behaviour, which may impact Newmont's stock movements.

How to Start Trading Newmont CFDs with Plus500

• Take Time to Learn: Make use of free resources like the Plus500 Beginner's Guide, to build a solid knowledge base before you begin trading.
• Register & Get Verified: Set up your Plus500 trading account to hone your skills or learn how to trade CFDs on our demo account.
• Start Trading: Make your first deposit, and find Newmont share CFDs on the Plus500 trading platform. Analyse whether to go long or short and put appropriate risk management strategies in place, remembering that significant financial losses can occur when trading CFDs.

Now that you know more about Newmont stock trading, you might want to start trading Newmont CFDs with Plus500.

Conclusion

Newmont's position as a leading gold producer makes it an attractive option for traders interested in the gold sector. CFD traders can make more informed choices by understanding its stock price dynamics, key influencing factors, and analysis methods (among other methods). However, it's essential to approach CFD trading cautiously due to the inherent risks and potential for significant losses.