Speculating on the price of gold becomes doubly risky when also speculating on the price of gold penny stocks. Both the metal and the inexpensive stocks can be highly volatile. However, where there is greater risk, there is greater potential for reward. For those interested in gold penny stocks, we have selected five that could do well for the rest of 2017. (To learn more about trading, Investopedia has a day trading course.)

Forecasts for the price of gold in 2017 range from $1,500 to $1,600 per ounce. As of this writing, the metal is selling for $1,260.50 per ounce. The target price range, if realized, could help some of these companies. (See also: What Drives The Price Of Gold?)

Here are five gold penny stocks that could do well for the rest of 2017. All figures are current as of August 10, 2017.

1. Golden Star Resources

Golden Star Resources Ltd. (GSS) remained flat for the last two-thirds of 2016. This is actually a good sign. The stock has time to consolidate its gains from the first part of the year and didn’t lose them.

For 2017, the stock failed to break upward when it hit resistance around $1.00. The stock has dropped to about $.71 per share. It found support at this price recently, so investors should watch to see if it bounces upward from here.

Total revenues and operating income have been increasing for the past four quarters.

  • Avg. Volume: 2,392,633
  • Market Cap: $268.18 million
  • PE Ratio (TTM): -5.42
  • EPS (TTM): -0.13
  • 1y Target Est: 1.00

2. Entrée Gold Ltd.

Entrée Gold Ltd. (EGI) engages in exploration and development in the United States, Mongolia, Peru and Australia, though it is based in Vancouver, Canada. The company has been reporting negative net income, but it has been paring its losses the last four quarters.

This stock is not very liquid. Speculators who want to sell it could find it difficult to find a quick buyer when the time comes.

EGI broke sharply upward at the start of 2017, and has held on to most of its gains.

  • Avg. Volume: 84,831
  • Market Cap: $79.91 million
  • PE Ratio (TTM): -14.74
  • 1y Target Est: 0.48

3. Paramount Gold Nevada Corp.

Paramount Gold Nevada (PZG) spiked dramatically in mid-2016, then fell back. It has now drifted downward to $1.40 per share. With the 50-day moving average below the 200-day moving average, investors would be wise to wait for the shorter average to cross upward before investing.

If gold prices rise, PZG could return to profitability. It focuses on Nevada gold. The company has staying power. It has been in business since 1992. Paramount Gold makes the list due to its longevity and its ability to profit from rising gold prices.

  • Avg. Volume: 32,509
  • Market Cap: $24.89 million
  • PE Ratio (TTM): -4.91
  • EPS (TTM): -0.28
  • 1y Target Est: 1.57

4. Vista Gold Corp.

The chart for Vista Gold Corp. (VGZ) looks nearly identical to the one for Paramount Gold above. After a mid-year spike in stock price in 2016, VGZ fell into a base, then drifted downward.

The company has no debt, but it did not report revenues for more than 12 months. On September 30, 2016, it reported negative $2.08 million in earnings.

This stock illustrates the difficulty in getting reliable and current information on penny stocks. The stock chart shows that the stock price has dropped to $.75 per share. However, volume has been light, so this does not look like a major selloff.

5. Gold Reserve Inc.

Gold Reserve Inc. (OTC: GDRZF) has been mining and prospecting in Venezuela since the 1950s. The stock is trading under $2.25 per share. We are counting any stock under $5 as a penny stock.

The stock broke sharply upward in mid-June, then again in early July. Gold Reserve is in a position to benefit from rising gold prices. The company has been in business since 1998.

  • Avg. Volume: 16,720
  • Market Cap: $323.05 million
  • PE Ratio (TTM): -11.82
  • EPS (TTM): -0.3
  • 1y Target Est: 0.75

The Bottom Line

These penny stocks usually follow the price of gold unless there is mismanagement or an unforeseen event that hurts one of them. Perform as much due diligence as possible and keep a close watch on the trend in gold prices. Penny gold stocks are very high-risk, so investors should be slow to buy and quick to sell.

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