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Gold is often considered a safe-haven asset, meaning investors tend to flock to gold during economic uncertainty or market turbulence and volatility. During a recession, investors may be more likely to seek the safety and stability of gold, which can help support the price of gold stocks. This mindset of the investors has seen a wave of trading in the gold market, in the form of gold shares and gold reserves.
But, over the past 12 months, this precious metal has been going through a volatile phase. Gold is again surging upwards towards achieving an ounce price of around $1,900 after reaching a peak of nearly $2,080 in the spring of last year and a low of $1,620 in the fall. Therefore, many people are speculating about whether gold prices are again on the rise.
People have always treated metals like Gold and silver as commodities and would generally prefer to buy Gold than investing in gold stocks or gold ETFs or gold mining stocks which are actively traded in the stock market. They tend to generally refrain from gold investing in form of shares and tend to be biased towards buying gold bullion. Certainly, this scenario is changing and people are shifting to gold investment in form of securities. Gold stocks are less expensive and more straightforward to manage than physical gold. They offer an excellent method for portfolio diversification. During a recession, traditional stocks and other assets may decline in value. Gold stocks can diversify an investment portfolio, as gold often has a low correlation with other asset classes, such as stocks and bonds. By diversifying their portfolio with gold stocks, investors can reduce their overall portfolio risk.
Here Are The Top 5 Gold Stocks List to Invest In Right Now
Top 5 Gold Stocks Smart Investors Are Buying Right Now
Barrick Gold
With 16 active sites spread across 13 nations, Barrick Gold is among the best gold mining companies. It engages in the exploration, mine development, and production of gold and copper. As soon as the company’s Tanzanian mining results for 2022 were public, the mining world was abuzz. According to the reports above, the company met its upper end of projection for the year and outperformed by producing a combined production of 547,000 ounces, much higher as compared to other mining companies in the league. Its rise over the previous year’s production had been tremendous and surpassed market estimates. Barrick released another statement stating that it could raise its proven and probable gold mineral reserves by as much as 6.7 million ounces net of depletion in 2022 while maintaining its grade. All these were possible despite an increase in the reserve price assumption.
Barrick Gold achieved this because of its commitment to modernization and reduced costs in its African mines. Improved infrastructure facilities paved the way for better expense management while increasing production efficiency and output. Besides, their contributions towards maintaining strong community relationships have also benefitted it largely. The stock closed on February 15 at $17.17, with an average target price of $22.31, a potential upside of 30%. This stock should be on everyone’s buy list as it is a potential store of value to invest in. When you include the 3.07% dividend yield, the upside is 33%.
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Franco Nevada
Franco Nevada is a gold-focused royalty and streaming company operating mainly across Latin America, the United States, and Canada. The company is also interested in silver, platinum group metals, oil & gas, and other resource assets, and its usual operations are divided into Mining and Energy sectors. Its portfolio comprises over 54 producing assets, including four larger cash-flowing assets called Antamina, Antapaccay, Candelaria, and Cobre Panam, and interest in 41 advanced assets (currently non-income producing) 223 exploration-stage mining properties.
The company usually pays an initial cash sum for a portion of future metal or resource output, which supports mining and oil and gas companies during the launching or expansion of their operations. Most of its revenue is from the US and its surrounding regions, and only a small portion is from the rest of the world. It might appeal to growth-oriented investors who want to access a dividend-paying Canadian gold stock. This is because Franco Nevada pays regular dividends and has also increased its dividends this time, although its payout is slightly lower than the average yield of Canadian Gold Stocks. The most distinguishing factor, moreover, is its lower yield comes with a higher P/E multiple, indicating it is a good growth stock.
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Royal Gold
Royal Gold is one of the best-performing gold companies in the current year, despite the fear of an impending recession looming. Considered one of the world’s leading precious metals stream and royalty companies, it is engaged in acquiring and managing precious metal streams, royalties, and similar production-based interests. As of last year, the company owned interests in 185 properties on five continents, including claims in 41 producing mines and 19 development-stage projects.
Royal Gold is famous for its solid fundamentals, and many investors prefer it. With a high reinvestment rate, the company has seen considerable growth in its earnings despite having a lower ROE. Moreover, although it had missed EPS estimates by $0.03 last quarter and lost close to 5% of its value, its returns have more or less constantly been positive. So, most long-term investors are bullish on its earnings release. Further, the fact that Royal Gold has been associated with acquiring additional Royalty interests in the World-Class Cortez Gold Complex in Nevada indicates there might be a positive outcome in the company’s income level soon.
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Agnico Eagle Mines
Agnico Eagle Mines is a gold producer from Canada which operates across Canada, Finland, and Mexico and is engaged in the exploration and development of gold, silver, zinc, and copper deposits. The Agnico stock has a riskier profile than the other gold stocks mentioned above. The stock has lost close to 5% since the beginning of the year but still represents a fairly valued business. It might run at a rich premium to earnings, and its five-year growth rate stands at 28.23%. Also, its margins ping at 5.49% at the bottom line, which is significantly higher than many of its peers. This shows the company’s fundamentals, and the overall balance sheet is also strong. Therefore, the market believes this stock has excellent upside potential.
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Rio Tinto
Rio Tinto is an Australian multinational company that is the world’s second-largest metals and mining corporation. Due to its current low price, Rio Tinto stock is regarded as one of the most significant value stocks. Over the next decade, the rising consumption of commodities due to the growing world population will assist companies like Rio Tinto to improve profits for mining. Additionally, Rio will benefit from the shift to green energy because of the increased demand for metals like cobalt, copper, and aluminum, which are also exposed to. The company is also engaged in gold mining.
Other than that, the company’s Quebec factory that manufactures scandium oxide and its purchase of the Rincon Mining lithium asset in Argentina last year would also help it increase revenues as the demand for EVs rises. Likewise, Rio’s broad network of top-tier assets and substantial cash reserve can support the business in further enhancing its operations.
While the market is filled with innumerable securities such as hedge funds, ETFs, equities, and commodities to trade in, the current and clear winner among these is gold stocks. This asset class is slowly and steadily making its way to everyone’s portfolio. Unlike other precious metals, Gold, because of its capability of showing a positive reaction to geopolitical risks becomes an indispensable commodity for many world economies. Whether it is a bull market or a bear market, the demand for global gold securities is continuously surging as it offers long-term store of value to its investors. As every ounce of gold that we have owned has given us multiplying returns, it is the time to trust its counterpart as it prepares for an unforgettable era of gold investment.
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