Is Fortescue Metals Group Limited set to soar?

Shareholders of Fortescue Metals Group Limited (ASX:FMG) and Rio Tinto Limited (ASX:RIO) might have a better day than those in Newcrest Mining Limited (ASX:NCM) and Woodside Petroleum Limited (ASX:WPL).

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Australian investors are set to end the week with a positive day on the share market, after the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) finished Thursday's trading session up 1%. Overnight the Dow Jones soared 1.5%, while the S&P 500 rallied 1.3% which has set the tone for a strong session on Friday.

While investors will no doubt be in a bullish buying mood today with the market likely to extend its gains even further – so far the index is up 12.1% over the past three months – it's likely that some widely-held companies particularly in the energy and resources space will remain under pressure…

Amongst the stocks that might struggle to head higher today are gold stocks such as Newcrest Mining Limited (ASX: NCM). According to a report in the Fairfax media, one of the most accurate gold forecasters has stated that a tightening by the US Federal Reserve could send the gold price lower and towards US$1,100 this year.

Meanwhile, overnight the oil price slipped again after reports that US stockpiles of the 'black gold' were once again on the rise.  Despite its share price enjoying a gain of 1.1% yesterday, Woodside Petroleum Limited (ASX: WPL) and its peers may struggle to follow the market higher today in the face of the ongoing oil supply glut, and a slide overnight of over US$1 in the West Texas Intermediate oil price to US$47.05.

Turning to the iron ore market, shareholders in Fortescue Metals Group Limited (ASX: FMG) and other iron ore producers such as Rio Tinto Limited (ASX: RIO) could be in for some relief today thanks to the price of iron ore recovering slightly overnight from its six-year low of US$57.70 a tonne. The plunge in the base metal's price has left Fortescue languishing at a fresh 52-week low of $1.91 a share, while Rio's share price is down 6% in just the last five trading sessions.

Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned. The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.​    

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