Golden Opportunities: 3 Stocks to Buy as Gold Prices Reach New Heights

Stocks to buy

Gold prices have been enjoying a very strong surge over the past two months, defying earlier predictions of a cooldown and surpassing the psychologically important milestone of $2,000 an ounce. The rally has significantly impacted the performance of gold stocks, reflecting heightened investor interest in the sector.

The yellow metal experienced a significant drop in U.S. trade on Wednesday after consumer price index data revealed higher-than-expected inflation growth in March, contributing to a surge in the dollar to five-month highs.

However, gold prices staged a recovery in the following days amid signs of ongoing economic weakness in China, which bolstered safe-haven demand for the precious metal. Moreover, the increased geopolitical tensions in the Middle East also pushed gold prices to fresh record highs.

Overall, gold continues to attract safe-haven demand amid concerns about deteriorating economic conditions worldwide. Major central banks in Asia and other emerging markets have been increasing their gold holdings in recent months, with the People’s Bank Of China (OTCMKTS:BACHY) purchasing gold for the 17th consecutive month, reflecting heightened risk aversion.

This rally in gold prices has also prompted financial institutions like Goldman Sachs (NYSE:GS) to revise their outlooks, with the investment bank now forecasting even brighter days ahead for the precious metal. Goldman Sachs raised its forecast for gold prices, citing the metal’s relative stability despite stronger-than-expected U.S. CPI data this week. The bank noted that gold’s bull market is not being driven by the usual macroeconomic factors, leading to their decision to revise their forecast.

More precisely, Goldman Sachs upgraded its price forecast to $2,700 per ounce by year-end, compared to the previous expectation of $2,300 per ounce. These gold stocks will likely benefit from the potential surge.

Royal Gold (RGLD)

An image of multiple gold bars. Gold prices

Source: Shutterstock

Royal Gold (NASDAQ:RGLD) is a leading gold royalty company. With a diversified portfolio of assets worldwide, Royal Gold offers investors exposure to the gold mining sector without the operational risks associated with traditional mining companies.

Royal Gold announced last week that its subsidiary, RGLD Gold AG, sold about 49,500 gold equivalent ounces (GEOs) in the first quarter of 2024. That comprised approximately 38,100 ounces of gold, 635,000 ounces of silver and 1,100 tonnes of copper under its streaming agreements.

The subsidiary had an inventory of approximately 16,800 ounces of gold, 349,400 ounces of silver and 400 tonnes of copper as of March 31, 2024. During the first quarter, RGLD Gold AG realized average prices of $2,054 per ounce for gold, $23.22 per ounce for silver and $8,453 per tonne ($3.83 per pound) for copper.

Back in February, Royal Gold reported net income of $239.4 million, or $3.64 per share, on revenue of $605.7 million and operating cash flow of $415.8 million. In the fourth quarter of 2023, the company reported net income of $62.8 million, or $0.95 per share, on revenue of $152.7 million and operating cash flow of $101.1 million.

Royal Gold shares are almost flat on the year.

Newmont (NEM)

Newmont logo on a mobile phone screen

Source: Piotr Swat/Shutterstock

Newmont (NYSE:NEM), one of the best-performing gold stocks, is a leading gold mining company with operations and assets spanning several continents. Newmont offers a strong exposure to surging gold prices as it is one of the world’s largest gold producers.

In 2023, Newmont completed the acquisition of Newcrest Mining Limited, becoming the world’s leading gold company with robust copper optionality. The company delivered $1.4 billion in dividends and produced 5.5 million gold ounces and 891 thousand GEOs last year.

Looking ahead to 2024, Newmont said it aims to focus on its Tier 1 Portfolio, comprising eleven managed Tier 1 and Emerging Tier 1 assets and three non-managed operations. The company also said it remains on track to achieve $500 million in synergies related to the Newcrest transaction by the end of 2025.

Newmont stock is down about 7% on the year.

Barrick Gold (GOLD)

The Barrick Gold (GOLD) logo is displayed on a smartphone screen over a bright blue background.

Source: madamF / Shutterstock.com

Barrick Gold (NYSE:GOLD) is a leading gold mining company headquartered in Toronto, Canada. Barrick Gold is known for its large-scale gold production, one of the key reasons why investors see GOLD as one of the top gold stocks to own.

Barrick Gold reported adjusted fourth-quarter profit that topped analyst expectations. Free cash flow totaled $136 million, compared to negative $96 million the previous year. For the year, Barrick forecasts gold production between 3.90 million and 4.30 million ounces, with all-in sustaining costs per ounce ranging from $1,320 to $1,420.

Barrick maintained its dividend at 10 cents per share and introduced a new share buyback program. The board authorized a buyback program of up to $1 billion, reflecting the company’s confidence in its financial position and commitment to delivering value to shareholders.

The GOLD stock is nearly flat on the year.

On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.

Articles You May Like

Bet Against Tech Stocks with This Bold, Lower-Risk Trade Idea
So Much for That: Microsoft Just Blew Up Its Gaming Strategy
‘I’m weary of repeating myself’: How do I deal with rich friends who take $22,000 cruises and book $800 hotel rooms? Prices are crazy enough already.
China’s Comeback Kids: 3 Stocks to Ride the Dragon’s Resurgence
3 Streaming Stocks to Sell in May Before They Crash & Burn