Travis Grant
Gold prices reached an all-time high of $2,448.80 per ounce on April 12, prompting many investors to start adding gold and gold stocks to their portfolios. This surge is part of a broader trend since the beginning of the year, with spot gold prices climbing 13% year-to-date (YTD).
Several factors are driving this trend, including monetary policies by global central banks, heightened geopolitical tensions in the Middle East, and the anticipation of interest rate cuts by the U.S. Federal Reserve and other nations. Central banks, particularly those from BRICS Plus nations, are accelerating their monthly purchases of gold. There is a noticeable trend of these banks favouring investments in gold over U.S. treasuries.
Major financial institutions echo this optimism; Citigroup predicts that gold will “shine bright like a diamond,” while Goldman Sachs has recently declared an “unshakeable bull market” for gold Both institutions adjusted their yearly forecasts for gold prices to $3000 and $2700, respectively.
As prices continue to soar, here are the top five gold stocks you should consider adding to your portfolio:
- Bedford Metals Corp. (TSXV: BFM)
- Harmony Gold Mining Ltd. (NYSE: HMY)
- Eldorado Gold Corp (TSX: ELD)
- Alamos Gold Inc. (TSX: AGI)
- iShares Gold Trust ETF (NYSEARCA: IAU)
1. Bedford Metals Corp.
Bedford Metals Corp. (TSXV: BFM) is a standout performer in the gold exploration sector. Its stock value has surged 2133% over the past year and 302% YTD.
The company’s stock success is due to Bedford’s effective exploration strategies and key findings at its Margurete Gold Project in British Columbia, Canada. Significant gold data has been uncovered previously, including 6.18 grams of gold per tonne at the surface. This momentum is expected to continue as Bedford Metals embarks on its 2024 exploration program.
Investors looking for a true gold growth stock at a fraction of the price of gold will find Bedford Metals a compelling investment opportunity. Gold trends suggest a continuous upswing for the foreseeable future. Given Bedford’s price, location, position compared to its peers in the sector, and senior management, the price can be expected to reach 710% growth, contingent on successful exploration results and gold price momentum.
Bedford Metals Corp’s recent acquisition of the Ubiquity Lake Uranium Project’s recent private placements shows a strong initiative from management to acquire and expand their current projects that will propel their share price higher.
2. Harmony Gold Mining Ltd.
Harmony Gold Mining Ltd. (NYSE: HMY) is a South African-based gold miner with operations in South Africa, Australia, and Papua New Guinea. It has shown commendable performance in the gold market, and the company’s consistent sales growth over the past decade underscores its operational resilience.
Over the last five years, Harmony’s stock has surged by 468%, with a 79% increase in the past 12 months alone. This performance reflects the company’s effective management and robust business model in a competitive industry.
The company also has some exposure to copper through its mining activities in Queensland, Australia. This diversification within its mineral portfolio adds an extra layer of stability to its business. In the last year, Harmony grew its revenues by over 15%.
With the ongoing rally in gold prices, fueled by global economic uncertainties and a bullish outlook from major financial analysts, Harmony is well-positioned for even greater revenue growth in 2024.
Currently trading at less than $10, Harmony Gold Mining presents a compelling investment opportunity. Its healthy solvency ratio further enhances its attractiveness, suggesting that the stock is trading below its potential value, making it a promising bet for investors seeking exposure to the gold and minerals sector.
3. Eldorado Gold Corp.
Eldorado Gold Corp (TSX: ELD) is a prominent gold and base metal miner operating in Canada, Turkey, and Greece. This company stands out in the gold mining sector for its operational footprint, impressive financial performance, and strong growth prospects.
Eldorado’s earnings have historically been volatile, with the company experiencing loss-making and profitable years. However, it has managed to maintain overall sales growth over the past five years, albeit with some fluctuations.
A key measure of its financial stability is its solvency ratio of 38%, well above the 20% threshold that is generally considered safe. This high solvency ratio demonstrates that Eldorado has substantial cash flow to cover its liabilities, positioning it well to manage financial obligations and invest in growth opportunities.
Eldorado’s stock performance has been notably strong, delivering returns of 322% over the past five years and 33% over the past year. This robust price performance can be attributed to market confidence in the company’s growth potential. These figures reflect high expectations from investors, driven by the rising gold prices seen in 2023, which typically bolster investments in the sector.
Overall, Eldorado Gold Corp. represents a dynamic investment opportunity in the gold mining industry. It is characterized by strong price performance, solid financial health, and promising growth in earnings per share.
4. Alamos Gold Inc.
Alamos Gold Inc. (TSX: AGI), a Canada-based intermediate gold producer, is making notable strides in the industry with its diversified production capabilities from three operational mines in North America. These include the Young-Davidson and Island Gold mines in northern Ontario, Canada, and the Mulatos mine in Sonora State, Mexico. Each of these mines is strategically located in significant gold mining regions, enhancing Alamos Gold’s access to rich gold reserves.
The company is also proactive in expanding its operations, as evidenced by the ongoing Phase 3+ expansion at Island Gold and the development of the Lynn Lake Project in Manitoba, Canada. Alamos is not just limited to gold; it also owns the Qiqavik Gold Project in Northern Quebec, which is notable for its high-grade gold and gold-copper showings. This diversity in projects and geographic spread underpins the company’s growth potential.
Recently, Alamos Gold received a major boost from financial analysts who have substantially upgraded their revenue and earnings forecasts for the company. The updated consensus from four analysts projects revenues to reach US$1.2 billion in 2024, marking a significant 16% increase over the past year. Moreover, statutory earnings per share are expected to rise by 39% to US$0.73. This upgrade reflects a notable analyst sentiment shift driven by improved business fundamentals and a promising outlook for gold production.
This heightened analyst confidence, combined with the company’s strategic initiatives and operational expansions, positions Alamos Gold as a compelling investment option in the gold mining sector. Investors and shareholders may find Alamos particularly attractive given its robust project pipeline and the optimistic revenue and earnings projections, signaling strong growth prospects ahead.
5. iShares Gold Trust
The iShares Gold Trust ETF (NYSEARCA: IAU) recently experienced a significant increase, gaining nearly 20% in the last 6 months. Over the last 5 years, the ETF has climbed 81%.
IAU offers another viable option for investing directly in gold. Notably, it has a lower expense ratio than its larger rival, SPDR Gold Shares, providing a cost-effective way for investors to gain exposure to gold prices.
This ETF is an excellent proxy for owning physical gold without the complexities and costs of storing and insuring the metal. The gold bullion is securely stored at the London branch of JPMorgan Chase, ensuring safety and reducing overhead for investors. Historically, the ETF has closely mirrored the movements of gold prices, with only minor deviations attributable to its expense ratio.
From a signals perspective, the iShares Gold Trust ETF generates positive indicators. It holds buy signals from short-term and long-term moving averages, indicating a favourable stock outlook.
Investors should closely monitor IAU because of the current technical setup and the positive gold price momentum. The recent divergence between volume and price could signal important developments in the near future. This ETF remains an attractive option for those looking to invest in gold, with the added benefits of lower costs and logistical ease compared to handling physical gold.
