Travis Grant
Gold prices have been rising for over 20 years, with total gold demand hitting a record last year. 2024 is forecast to be another record year with many more to come. Among the several factors pushing this gold bull market are BRICS countries settling on using gold as the basis for international exchange and US central bank interest cuts. A recent World Gold Council (WGC) survey of 70 central banks reveals that expected gold order purchases will be at record highs.
According to the survey, no central banks expect a decline in gold purchases, and 81% anticipate an increase. Nearly a third of central banks plan to buy gold in the next 12 months. Central bank gold purchases have been an important factor for the precious metal over the last several years, becoming an institutional practice and virtually ushering in a new gold standard.
Gold has already surpassed the euro in global reserve shares as banks continue to increase their gold price forecasts. Swiss Bank UBS (NYSE: UBS) expects that gold prices will jump to $2,800 per ounce by the end of next year, while Bank of America (NYSE: BAC) forecasts prices will reach $3000 within the next 12-18 months.
The best undervalued gold investments are in companies that produce it. Here’s the best gold stock to buy now. Investors seeking even higher returns from rising gold prices have been investing in Bedford Metals (TSX.V: BFM, FWB: O8D, OTC: URGYF), which has shown impressive growth, achieving returns of 4,080% over the past 12 months. With a new gold supercycle on the horizon, investors will discover that gold stocks will become the new growth stocks.
Central-Bank Buying & Fed Rate Cuts Usher in a New Bull Market for Gold
Gold is widely regarded as a safe-haven asset, but long-term global trends are causing it to grow like a growth stock. Central banks are concerned about the perceived value of their currencies and the security of their trade, prompting them to intervene in the gold market and buy gold while it’s on sale. Their intervention and purchases have driven the price up over 20% in the past year, reaching an all-time high of $2450 per ounce in May.
Unlike stocks or bonds, gold typically moves independently of other asset classes, offering valuable diversification benefits. It often performs best during market volatility, serving as a stabilizing force when other investments decline.
In 2023, gold accounted for 18% of global reserves, surpassing the euro’s 16%, indicating a shift in reserve preferences. U.S. dollar total reserves dropped to 48% that year due to waning trust in fiat currencies amid asset bubbles, escalating conflicts, and inflation fears, while gold shows no signs of slowing down.
Even AI needs gold to grow. Beyond being a store of wealth, gold is a major component in Nvidia’s (NASDAQ: NVDA) products. Nvidia’s rise due to AI’s machine learning demand has come from its impressive chips, which use gold to improve their conductivity.
Although not all chip manufacturers have seen behemoth stock growth like Nvidia has in recent years, they all use gold as an industrial component in their chips. The electronic device you are using now likely contains gold, along with the billions of other devices in circulation.
Rising gold prices are expected to lead to record-breaking gold-mining profits in Q2 2024, creating a bullish outlook for gold stocks. Historical data indicates that gold typically experiences a seasonal rise starting in July and continuing through the latter half of the year. As more traders recognize gold’s potential, they will likely invest in gold stocks during the summer to capitalize on its growth.
The Canadian Gold Mining Stock to Buy and Hold While It’s Cheap
Bedford Metals (TSX.V: BFM, FWB: O8D, OTC: URGYF) is a mineral exploration company specializing in uncovering and developing gold deposits in British Columbia, Canada. The company has experienced extraordinary growth, with its stock price rising 318% since the start of the year and 4,080% over the past twelve months. Despite this surge, the company is still very affordable and has plenty of room to grow in 2024.
Investing in gold mining companies like Bedford offers considerable advantages over direct investments in physical gold. As gold prices climb, companies like Bedford scale production and optimize operations to enhance profitability. These incredibly strong fundamentals have typically resulted in mining companies’ stock prices increasing faster than the price of gold itself.
Bedford’s remarkable gains over the last year exemplify this relationship. The company is advancing operations, particularly at the Margurete Gold Project in British Columbia. Past explorations have uncovered significant gold deposits, including findings of 6.18 grams of gold per tonne at the surface.
British Columbia’s significant gold reserves and favourable mining conditions continue to attract substantial investment from exploration and mining companies. A year ago, industry reports estimated the total value of provincial mining production would reach $15.9 billion.
Bedford Metals’ strategic decisions have put it on track to reap the rewards of increasing global gold demand and record-breaking prices. The recent bull market for gold highlights the metal’s insufficient supply to meet economic demands.
Growth stocks like Bedford Metals will continue to thrive by addressing gold’s supply constraints, and early investors will ride this wave all the way to the bank.
