Gold Mining is regarded as one of the most profitable industries to invest in. Apart from this valuation, gold stocks have lower prices than ever and may be an excellent time for investors looking to hedge against inflation.
The prices of gold shares increase exponentially whenever the price of gold increases even slightly. Since these companies hold significant quantities of gold, even small movements in the price of gold stocks can indicate rapid growth.
However. trading on the price changes of stocks that are engaged in the mining, extraction, and production of physical gold or coins is an option for traders who don't want to invest directly in physical gold.
This article will cover the top gold mining stocks to watch in 2022-23 and how to trade gold stocks utilizing derivative products.
Also Read: How to Trade Using the Candlestick Dark Cloud Cover pattern
Contents
- What Are Gold Mining Stocks?
- Choose The Best Gold Stocks to Buy
- Buying Gold Stocks and Following the Right Momentum
- What Are The Most Profitable Gold Mining Companies?
- List of The Top Gold Miners Based On ETF
- Bottom Line
- FAQ
What Are Gold Mining Stocks?
Gold stocks are shares of gold that a person owns in a company that deals in gold, such as mining companies, a mutual fund, or an exchange-traded fund. It means that you have a stake in the business and are obligated to any profits from your investment in gold stocks.
A gold ETF provides comprehensive sector exposure by holding either physical gold or shares of gold mining companies. You don't need to be an expert stock picker to benefit from the growth of the gold industry because many gold stocks and ETFs are widely accessible.
Choose The Best Gold Stocks to Buy
Gold's price is influenced by various factors, such as inflation and monetary policy. For many years, investors looking to protect themselves from these risks favored gold. However, as cryptocurrencies gain popularity, there is a new risk that investors need to be aware of that could result in gold and other precious metals losing some of their appeal.
Despite this, investing in gold mining companies is one of the best ways to profit from the gold market. For this reason, they gain from rising gold prices and their capacity to raise production while lowering expenses.
As a result, top gold mining firms frequently outperform gold prices. Top-tier gold miners have manageable debt loads, low-cost structures, and little exposure to risky mining ventures.
Meanwhile, gold streaming businesses typically offer the best risk/reward potential among gold-focused investment options. They are in an excellent position to gain from a higher gold price without taking on the risks involved in mining actual gold.
Finally, buyers of shares in gold ETFs, which are more practical and economical options for investing in top gold stocks, may want to avoid trying to choose the best individual gold mining stocks.
Buying Gold Stocks and Following the Right Momentum
A factor-based investment strategy known as momentum investing entails buying a stock whose price has increased more quickly than the market as a whole. Momentum investors think that since the factors that made a stock outperform the market won't suddenly disappear, it will continue to do so.
Additionally, other investors who want to profit from the stock's performance will frequently buy the stock, driving up the price and propelling the stock even higher.
Here we've listed five gold stocks with the highest total return over the previous 12 months:
Alamos Gold Inc.
The ticker symbol for Alamos Gold in the United States is AGI. Alamos Gold released financial results for Q3 2022 on October 26. While operating revenues increased by 7.9%, the company reported a net loss compared to net earnings for the same quarter last year. Unrealized foreign exchange losses, among other things, impacted net loss.
Perseus Mining Ltd.
An Australian company, Perseus Mining, specializes in holding properties in Ghana and Côte d'Ivoire. On schedule, the company will produce 500,000 ounces of gold in 2022. Perseus Mining shares are traded OTC in the US under the PMNXF ticker.
Osisko Mining Inc.
A Canadian company called Osisko Mining purchases explores, and develops properties in Canada that yield gold. Osisko owns several mining assets, including a 100% stake in the Quebecian Windfall gold deposit. Additionally, Osisko shares are traded OTC in the US under the symbol OBNNF.
Orla Mining Ltd
On October 11, the company provided a Q3 operational update, noting that the guidance for 2022 gold production had been raised from 90,000 to 100,000 ounces to 100,000 to 110,000 ounces. On November 11, Orla released its Q3 financial results.
Yamana Gold Inc.
It produced more than one million ounces of gold equivalent in 2021. Silver production made up 12% of the company's total production for the year, while gold equivalent production made up 88%. Yamana Gold declared on May 31 that Gold Fields Ltd. (GFI) would purchase Yamana.
What Are The Most Profitable Gold Mining Companies?
Newmont Gold Corp.
Newmont is the largest gold mining corporation in terms of output and stock market value. The company's scale benefits it when purchasing goods or services and enables operational synergies. It also has many financial resources to grow by discovering new mines or acquiring those owned by other businesses.
However, quality is just as crucial as size, and according to Casanova, the gold mining business has reached a stage where massive miners are no longer regarded as good miners. They're good, she continues, since they can provide value. Newmont has had a loss of roughly 11.8% this year as of July 15, compared to the S&P 500's decline of 18.9%.
The company's all-in sustaining cost for the first quarter was $1,156 per ounce of gold. With revenues of $3 billion and an adjusted net income of $546 million, it produced 1.34 million ounces of priceless metal.
Barrick Gold Corp.
Barrick, the No. 2 gold miner in the world, has outperformed the market so far this year, though not by as much as Newmont. As of July 15, Barrick had fallen 17.6%. Similar to Newmont, Casanova claims that Barrick has constantly increased value for shareholders by expanding its portfolio of mines, increasing its profitability, and increasing its share metrics over time.
The company produced over 990,000 ounces of gold within the first quarter, with an all-in-sustaining cost of $1,164 per ounce. It also recorded adjusted net earnings of $463 million on revenues of $2.85 billion.
Agnico Eagle Mines Ltd.
The gold miner has consistently traded at a higher valuation and is a strong indication of the overall improvement in the gold mining business, according to Casanova. According to her statement, the company “has earned that high valuation by performing on their growth projects, by exceeding expectations, and by having a focused approach to growth.”
Stack's top recommendation for a well-established gold mining firm with solid fundamentals is Agnico Eagle. He emphasizes its 3.8% dividend yield and strong earnings. The mining operations generated $1.3 billion in revenue for the corporation in the first quarter, for a profit of $109.8 million.
Stack's top recommendation for a well-established gold mining firm with solid fundamentals is Agnico Eagle. He emphasizes its 3.8% dividend yield and strong earnings. The mining operations generated $1.3 billion in revenue for the corporation in the first quarter, for a profit of $109.8 million.
Endeavour Mining PLC
According to Casanova, this gold miner has demonstrated its ability to operate, assembling investments in mines and projects in West Africa. She claims that Endeavour is a “very well-run company” that consistently meets investor expectations.
The factory produced 14% more gold during the first quarter of 2022 than during the same time in 2021, and the price of that gold increased by 8%.
However, its total sustaining cost increased by just 1% to $848 per ounce, significantly less than the industry average. The company projects that metric to range between $880 and $930 for 2022.
K92 Mining Inc.(KNTNF)
The gold mining industry also includes “junior miners,” who are primarily focused on searching for gold, developing mines, or producing much smaller quantities than their larger counterparts. These companies are in addition to large mining firms with producing operations.
It is very speculative to invest in junior miners like KNTNF because many of the deposits don't work out, and the businesses fail. When gold is found, these businesses must take out large loans to build a mine that can produce gold.
K92 Mining, which has a generating mine in Papua New Guinea and gave companies an enduring all-in cost of $856 per ounce last year, is a pure speculation play that Stack likes. The business predicted in January that this year's value would be between $890 and $970, significantly less than the industry standard.
Franco-Nevada Corp.
Franco Nevada, whose first-quarter income and adjusted net income were both 10% greater than the same period in 2021, is one of the companies Casanova claims VanEck has been increasing its investment.
The business had $1.7 billion in capital available at the end of Q3 in 2022. The “most diverse royalty and streaming portfolio by asset, operator, and country,” according to Franco Nevada Corp.
Also Read: Engulfing Candle: A full explanation
List of The Top Gold Miners Based On ETF
- VanEck ETF
- VanEck Junior ETF
- Direxion Daily Index Bull 2x Shares
- iShares MSCI Global ETF
- Direxion Daily Junior Index Bull 2x Shares
- Sprott ETF
- MicroSectors 3X Leveraged ETN
- Sprott Junior ETF
- Direxion Daily Index Bear 2x Shares
- Direxion Daily Junior Index Bear 2X Shares
- US Global GO GOLD and Precious Metal Miners ETF
- Global X Gold Explorers ETF
- MicroSectors Gold Miners -3X Inverse Leveraged ETNs
Bottom Line
When investing in gold, there are many advantages to purchasing gold stocks than the actual metal itself. Investing in gold companies may offer better overall returns than doing so in gold itself. This is so that these businesses can increase production while cutting costs. By increasing their profits, gold mining companies may be able to raise their stock prices above the price of gold.
It's crucial to remember that financial markets are still incredibly volatile when deciding yet if gold is a sound investment right now. So, it is challenging to predict the gold price in the coming hours and even harder to provide long-term projections. As a result, analysts' predictions are subject to error.
We advise you always to conduct your own research. Before making an investment decision, consider the most recent and broader market trends, news releases, technical analysis, fundamental updates, and expert opinions like the Wheaton Precious Metals. Also, consider investing the money you truly can lose because past results do not guarantee future results.
FAQ
Is Gold Mining Stocks A Good Investment?
It's debatable whether gold is a particularly effective inflation hedge, but there is no doubt that it has maintained its value over time. Physical gold ownership is expensive and challenging. Therefore, purchasing gold-related stocks is a brilliant way for retail investors to add the necessary exposure to their portfolios.
