Gold Stocks To Buy Right Now
Gold stocks like Barrick are rallying, as gold prices soar to new highs. Ongoing inflation and global tension will likely further fuel this rally.
Gold stocks were among the best-performing stocks yesterday. Stocks like Barrick Gold rallied as much as 8%. With inflation heating up and world tensions escalating, gold stocks are a good place to be right now.
Wheaton Precious Metals Corp
Number of Hedge Fund Holders: 24
Wheaton Precious Metals Corp. is a Canadian mining company that deals in gold, silver, palladium, and cobalt resources. In 2021, the company produced 750,220 ounces of gold, which was above estimates and an increase of 9.9% from its 2020 levels. Wheaton Precious Metals Corp. has announced six new deals since the first quarter of 2021, which will enhance its annual gold-equivalent production by more than 120,000 ounces once production starts on most of these projects by 2024. As of February 28, shares of Wheaton Precious Metals Corp. have risen 16.42% in the last 12 months, and 8.76% in the last month.
In January, Wheaton Precious Metals Corp. agreed to a streaming deal with Adventus Mining for precious metals from its Curipamba project in Ecuador, with a price tag of $175.5 million. The mine is expected to produce an average of 17,000 ounces per year of gold, and 551,000 ounces silver per annum in the first five years of production. This deal will see Wheaton Precious Metals Corp. purchase 50% of payable gold production and 75% of payable silver production from Curipamba, until certain conditions are met before the percentage drops to 33% and 50% respectively for gold and silver.
What Are Gold Bars
Gold bars are available as cast or minted gold bars. Cast gold bars are when molten gold is poured into a mould. It then cools to form a gold brick and is removed from the mould. A minted gold bar is created by using several dies to cut out the bar and embossed lettering from a larger sheet of gold and metal.
Investors can buy gold on an allocated or unallocated basis either with a bank or through a bullion brokerage.
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Invest In Gold By Purchasing Stock In Gold Miners
Investing in the stock of companies that mine, refine and trade gold is a much more straightforward proposition than buying physical gold. Since this means buying the stocks of gold mining companies, you can invest using your brokerage account.
Some of the most popular stocks in this sector include:
- Newmont Corp. . Newmont is the worlds largest gold mining company, headquartered in Colorado. It operates mines in North and South America as well as Africa.
- Barrick Gold Corp. . This gold mining giant is headquartered in Toronto and operates in 13 countries around the world.
- Franco-Nevada Corp. . Franco-Nevada doesnt own any gold mines. Instead, it buys the rights to royalties from other gold miners.
Keep in mind, though, that the of gold companies are correlated with gold prices but also are based on fundamentals related to each companys current profitability and expenses. This means investing in individual gold companies carries similar risks as investing in any other stock. Single stocks may experience a certain level of volatility and do not provide you with the security of diversified funds.
Best Gold Stocks To Buy Now
Seven gold stocks to buy for your portfolio.
Gold prices have been on a bit of a roller coaster ride in 2021, hitting a short-lived high of more than $1,960 an ounce to start the year, then bouncing around in choppy trading to touch as low as $1,670 or so. Lately, however, gold has surpassed the $1800 range. With continued talk of inflationary pressures that could boost the value of gold in the months ahead, many investors are looking at how to position themselves for profits. One way is, of course, to buy gold itself. But another is to invest in the miners that extract gold from the ground and bring it to market at these elevated prices. Here are seven top gold stocks to consider.
Barrick Gold Corp.
Barrick Gold Corporation is one of the largest gold-specific miners out there with a market value around $35 billion at present. Headquartered in Toronto, it has ownership interests in gold mines that are located mainly in Africa and the U.S. Admittedly, the stock hasn’t fared well lately with a roughly 15% decline in GOLD stock over the last year or so compared with about 30% gains for the S& P 500. That said, shares have been on a decent run in the last few weeks thanks in part to the prospect of higher inflation, so now may be the time to consider adding a position in a gold miner like Barrick to ride the uptrend.
BHP Group Ltd.
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Why Investors Like Gold
Gold has a proven track record for returns, liquidity, and low correlations, making it a highly effective diversifier, says Juan Carlos Artigas, director of investment research at the World Gold Council.
These qualities are especially important for investors:
- Returns: Gold has outperformed stocks and bonds over certain stretches, though it doesnt always beat them.
- Liquidity: If youre buying certain kinds of gold-based assets, you can readily convert them to cash.
- Low correlations: Gold often performs differently from stocks and bonds, meaning when they go up, gold may go down or vice versa.
In addition, gold offers other potential advantages:
- Diversification: Because gold is generally not highly correlated to other assets, it can help diversify portfolios, meaning the overall portfolio is less volatile.
- Defensive store of value: Investors often retreat to gold when they perceive threats to the economy, making it a defensive investment.
Those are a few of the major benefits of gold, but the investment like all investments is not without risks and drawbacks.
While gold performs well sometimes, its not always clear when to purchase it. Since gold by itself doesnt produce cash flow, its difficult to determine when its cheap. Thats not the case with stocks, where there are clearer signals based on the companys earnings.
Why Im Looking To Snatch Up This Gold Stock Right Now
Victoria Gold is another Toronto-based gold producer that operates in Canada and the United States. This gold stock has climbed 18% in 2021 as of close on October 6. Its shares have climbed 6.3% in the week-over-week period.
It delivered net income of $1.3 million, or $0.02 per share. Meanwhile, Victoria Gold posted EBITDA of $28.4 million. This gold stock possesses an attractive P/E ratio of 10. Investors should consider this under-the-radar gold stock to kick off the month of October.
This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium service or advisor. Were Motley! Questioning an investing thesis even one of our own helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
The Motley Fool has no position in any of the stocks mentioned. Fool contributor Ambrose OCallaghan has no position in any stocks mentioned.
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Kirkland Lake Gold Ltd
Number of Hedge Fund Holders: 25
Kirkland Lake Gold Ltd. is a gold mining company headquartered in Toronto, Canada. The company has operations in Canada and Australia. It is one of the largest gold mining companies which produced 1.3 million ounces of gold in 2020. The company ranks seventh on our list of the best gold mining stocks to invest in.
In Q1 2021, Kirkland Lake Gold Ltd. reported net earnings of $167.8 million or $0.63 per share. The revenue for the quarter stood at $551.8 million. The gold production exceeded the guidance of 290,000 ounces and was recorded at 302,847 ounces. The strong earnings are driven by additional drilling at Detour Lake and enhanced exploration activities after Covid-19.
In 2021, the companys production target is between 1.3 to 1.4 million ounces. In Q1, Kirkland Lake Gold Ltd. returned $96.6 million to shareholders, $50.3 million of which was paid in dividends. Earlier in May, RBC Capital set a price target of $43 on KL stock, ranking it as a Buy. In 2021, the companys production target is between 1.3 to 1.4 million ounces.
At the end of Q1 2021, 25 hedge funds tracked by Insider Monkey have positions in Kirkland Lake Gold Ltd. , worth $401 million. Renaissance Technologies is the biggest shareholder of the company with shares worth $108 million.
Things To Remember Before Investing In Gold Stocks
Gold is not a cheap commodity and not playing your cards right could see you blow your hard earned money. Here are a few points which should be kept in mind if you intend to purchase gold stocks or already own them.
- Choose the investment mode As mentioned above, there are three popular options to invest in gold stocks, either directly in gold-mining companies, in gold ETFs or gold Mutual Funds. Each of these modes have their pros and cons and these should be kept in mind before spending your money.
- Ask an advisor It is possible to be overwhelmed while investing, which can hamper your investment choice. Availing the services of a financial advisor could cost you a little extra but they might help you get the best returns.
- Keep yourself updated It is imperative that you keep yourself abreast of daily happenings, ensuring you know everything about your investments on a given time.
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Features To Look For In A Gold Stock
- A strong balance sheet: As with stocks in general, a strong balance sheet with consistent earnings per share growth would qualify a stock for consideration. The balance sheet will also indicate the amount of cash on hand and the amount of debt outstanding. A miner needs cash flow to find more gold and to maintain the gold it holds in reserves, while more cash typically indicates lower debt.
- Location of mining operations: Most investment-grade mining companies operate multiple mines in their base country, as well as in other countries where the company owns an interest in mines and mining operations. Mines operated abroad could be at risk for a number of reasons, including geopolitical concerns, although most mining companies work with the governing bodies of the countries where their mines are located. Ideally, mines located abroad should be in politically stable countries to mitigate geopolitical risks.
- Solid operating margins: In the gold mining business, the better the margins, the higher the cash flow. The margins for gold miners tend to improve as the gold price trends higher, thereby fueling further upside in the price of gold stocks.
Gold Investments And Diversification
One benefit of gold investments is that they can help diversify your portfolio. Diversification refers to investing in a range of assets across a variety of industries, company sizes and geographic areas. Owning stock in a gold mining company or a gold ETF exposes you to the gold industry, and since gold does not necessarily move in tandem with the stock market, it can help further diversify your holdings. Of course, if your entire portfolio is made up of gold investments, it wont be diversified at all.
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How To Buy Physical Gold
If you decide that investing in physical gold is the right move for you, here are some things to keep in mind.
1. Find a reputable dealer. From working with pushy salespeople to falling victim to scams, navigating the world of buying and selling gold can be sketchy. Sellers can inflate their products value, or use persuasion tactics to create a sense of urgency to buy immediately. Doing some homework ahead of time can help you avoid a bad investment.
You can use the National Futures Associations Background Affiliation Status Information Center to check on a firm or individuals background.
2. Watch out for fees. Gold dealers typically charge more than golds spot price, or the price at which gold trades on a commodities exchange. This premium typically consists of a dealers fee and manufacturing and distribution charges.
3. Find secure storage. People joke about burying gold for a reason: Its valuable, and because it’s a physical commodity, people may try to steal it. Its important to anticipate storing your gold somewhere safe, whether that is a literal safe or a safety deposit box at a bank. Storing gold safely can get expensive. Depending on their size, safety deposit boxes at a bank can run from $30 to a couple hundred dollars a year.
4. Consider purchasing insurance. Insurance is an additional cost of owning physical gold. If you purchase insurance, be sure your policy covers the exact type of asset you have.
Cheap Gold Stocks With Dividends To Buy In 2022
The expectations of a rebound in gold prices could drive these two gold stocks higher in 2022.
After reaching their all-time high in August 2020, gold prices have seen a sharp downside correction. In 2021, the yellow metals prices dived by nearly 5% amid gradually easing concerns about COVID-19. Weakening gold prices also took a toll on the Canadian gold sector, as the shares of most gold miners slipped to underperform the broader market by a wide margin. Before I talk about two cheap gold stocks to buy in 2022, let me explain why investors should consider adding some gold stocks to their portfolios now.
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Want To Buy Gold Heres What You Should Know
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The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.
What do Scrooge McDuck and King Midas have in common? Hint: Its not a well-diversified portfolio. While owning gold sounds cool, and may even be considered responsible during a stock market downturn, investing in gold comes with some unique challenges and doesnt always pan out the way you might expect.
Picking The Best Gold Stocks
Many factors affect the price of gold, including monetary policy and inflation. For years, gold had been the top choice of investors seeking to hedge against these risks. However, the rise of cryptocurrencies could cause gold to lose its luster, which is an emerging risk that investors need to monitor.
That aside, one of the best ways to invest in the gold market is through gold mining companies. Thats because they benefit from rising gold prices and their ability to increase production and reduce costs. Consequently, top gold mining companies can often outperform the price of gold.
The top-tier gold miners have low cost structures, manageable debt levels, and limited exposure to risky mining projects. Meanwhile, gold streaming companies generally offer the best risk/reward potential among gold-focused investment options. They are well-positioned to benefit from higher gold prices without assuming the risks associated with mining physical gold.
Finally, investors who dont want to try to identify the best individual gold mining stocks can consider buying shares in gold exchange-traded funds. They are more convenient and cost-effective options for investing in gold stocks. A gold ETF offers broad exposure to the sector by owning either shares of gold companies or physical gold. Because of the wide availability of gold stocks and ETFs, you don’t have to be a stock-picking guru to participate in the gold industry’s upside.
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Gold Stocks Still Coiling
While the gold miners stocks remain out of favor, they are still coiling. This small contrarian sector has been winding up like a spring during this past half-year of technical basing. With great fundamentals getting even better, ignored gold stocks are due for an explosive move higher as traders rediscover their massive upside potential. Higher gold prices will catalyze that, which are coming in this super-bullish environment.
In the financial markets, perceptions of time are heavily-distorted. Traders weight the more-recent past much more highly when forming their outlooks on sectors. And for the great majority of the past nine months, gold stocks have been sucking wind. Thats so long in market-time that the gold miners have largely been forgotten. This recent mostly-weak price action is glaringly evident in this sectors leading benchmark.
What Is The Best Way To Invest In Gold In The Uk
Investors can either use a gold bullion brokerage to buy gold, contact a bank that offers a gold account or speak with a financial adviser or stock broking service for broader gold investments.
An adviser or broker can help to review your investment portfolio and find the best gold investment strategy for your circumstances.
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What Is The Difference Between An Allocated And Unallocated Gold Account
The main difference is about the ownership of the gold and who is responsible for the security and insurance of that gold.
When you buy gold on an allocated basis this means you have the title for this gold and are the legal owner. This means you are also responsible for its safe storage. As discussed, this also means you will have to consider security and insurance fees.
However, when investing in gold in an unallocated account from a bank or third party, you do not retain the legal ownership of the gold. Rather than buying the gold and you owning this asset, you will deposit funds to the bank. The bank in return would then repay your investment when requested at the appropriate value at the time.
The upside is that the bank is responsible for the security of the gold and the relevant insurance, but there is the risk that if the bank went bust then these gold reserves could be at risk and would not be protected under the Financial Services Compensation Scheme .