Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
Whenever uncertainty rises in the stock market, investors always prefer to buy gold, which is one of the reasons why the price of the precious metal has been rising recently. As the international gold price hit a record high this week, the price of gold denominated in Canadian dollars has reached C$2,898 per ounce. This is certainly good news for gold investors.
Of course, the higher the gold price is at its all-time high, the greater the likelihood of a pullback, which makes investing in gold stocks more difficult. However, one following gold stock should be the best option for investors who are averse to volatility.
There are a number of factors supporting higher gold prices in 2024, including expectations of Fed rate cuts, a depreciating dollar, and gold’s natural safe-haven and store-of-value features attracting investors and central banks to continue to hoard gold in large quantities as a hedge against risk and uncertainty.
However, so far this year, the stock prices of many gold producers are still in the process of discounting and selling off, despite the very strong price of gold. However, the following stock of a royalty and streaming company in the precious metals space should provide investors with more certainty and returns.
Mining is a capital-intensive industry and mining projects usually have long permitting, exploration and production cycles, so investors will have some concerns when considering mining stocks. However, Wheaton Precious Metals (TSX:WPM) may be an exception. As a royalty and streaming company, the company has been able to maximise gains from rising gold prices while minimising risk.
The company recently reported higher revenues because higher gold prices mean higher equity income. What’s more, the metals flow-through company, which had agreed to a lower gold price in its pre-signed contracts with miners, is now able to sell at a higher price, thus earning a huge profit. The company’s Q3 2023 earnings report showed a 16% increase in realized commodity prices, which also contributed to revenue. With the increase in profitability, the overall financial position of the company has also improved.
So even though Wheaton Precious Metals stock may not be a growth stock on the Toronto Stock Exchange, it offers investors far more stability than traditional gold mining companies. This gold stock also offers a 1.4% dividend yield, which provides some fixed income while waiting for capital gains.
