Gold has been a means of storing value for thousands of years. While it may not yield long-term returns like US stocks, it can serve as a valuable hedging tool within a diversified investment portfolio, offering non-correlated returns during challenging times. Notably, gold has outperformed the US stock market year-to-date, with even more significant performance over the past three months. Furthermore, since the beginning of 2022, gold’s performance has far surpassed the S&P 500 index – with a 28% increase in gold prices compared to a 14.5% rise in the stock index during this period.
Aside from investing in commodities, another way to capitalize on investment opportunities is through investing in gold mining companies, which can benefit not only from rising gold prices but also generate profits. Barrick Gold (GOLD), Agnico Eagle Mines (AEG), and Harmony Gold (HMY) are three leading gold mining companies that investors may consider adding to their portfolios.
Barrick Gold is one of the world’s leading gold mining companies, headquartered in Toronto, Canada. Established in 1983, Barrick operates mines and projects in North America, South America, Africa, and the Middle East. The company is renowned for its rich gold reserves, efficient production processes, and commitment to sustainable mining practices. Barrick also produces a significant amount of copper, providing a catalyst for bullish sentiment, as copper is another metal that has seen a price surge this year. With strong upward earnings forecasts, Barrick Gold has received a top-ranking (“Strong Buy”) from the Zacks.
Based in Toronto, Agnico Eagle Mines is a gold producer with mining operations in Canada, Mexico, and Finland, as well as exploration activities in Canada, Europe, Latin America, and the United States. The company currently has several compelling bullish catalysts for investors to consider. Over the past month, earnings expectations have surged significantly, resulting in a top ranking (“Strong Buy”) from the Zacks.
Harmony Gold is a South Africa-based gold mining company engaged in underground and surface gold mining, as well as related activities such as exploration, processing, smelting, and refining. By production volume, Harmony is the largest gold producer in South Africa, with a production of 1.47 million ounces in the 2023 fiscal year. Harmony also offers a dividend yield of 1.35%. Like the other companies, Harmony Gold has also received a top ranking (“Strong Buy”) from the Zacks.
Allocating 5%-15% of your portfolio to gold can provide the majority of the diversification and hedging benefits of holding gold. Going beyond this allocation could mean missing out on some traditional stock returns. By focusing on high-quality gold mining stocks, investors have the opportunity to benefit from rising gold prices and business growth.
