What are the Best Performing Gold Stocks in 2022?

August 16, 2022
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There has been a long-standing belief that gold is a haven in turbulent markets. Investing in exploration and mining companies has allowed investors to gain exposure to precious metals.

The gold industry includes companies like Franco-Nevada Corp., Newmont Corp., and Newcrest Mining Ltd., based in Canada and Australia.

VanEck Gold Miners ETF (GDX) has underperformed over the past year compared to the broader market for gold stocks. Over the last 12 months, GDX has returned -15.5%, underperforming the Russell 1000 Index -by 7.1%.

But where do you start if you want to get in on the action?

The following list of gold stocks offers a glimpse of some of the most promising prospects:

Why should you trade gold stocks?

Metals such as gold are considered safe-havens. Many investors buy gold to protect themselves from inflation, geopolitical events, and economic downturns that cause its price to fluctuate dramatically. Gold prices have been fluctuating dramatically since the start of 2022. Due to inflationary and geopolitical concerns, gold prices soared by double in the first few months of 2014.

Investing in gold stocks rather than the physical metal makes it possible to reap many benefits of gold investing. An investment in gold companies is potentially more rewarding than gold itself. Companies that produce gold can produce more with less expense. Consequently, gold mining companies may be able to outperform the gold price.

Nonetheless, not every gold stock outperforms gold. That is why investors should carefully select gold stocks to invest in.

5 gold stocks to buy in 2022

The following are the gold stocks that look promising in 2022.

1. Barrick Gold (NYSE: GOLD)

The company operates mines in North America, South America, Australia, and Africa, making it one of the world's largest gold producers. Nine gold mines comprise the company segments: Carlin, Cortez, Turquoise Ridge, Pueblo Viejo, Loulo-Gounkoto, Kibali, Veladero, North Mara, and Bulyanhulu.

Carlin mine generates the highest revenue for the company. Most of its revenue is generated in the United States.

2. Franco-Nevada Corp. (FNV)

The market value of FNV is just under $30 billion, making it one of the "Goldilocks" gold miners that are not so small that it could run out of capital. Still, it is also not so large that it becomes stagnant and cannot benefit from rising precious metals prices.

Besides energy exploration, it also mines silver and platinum. Nevertheless, it is a gold play as its mining segment generates about 65% of its revenues from gold alone.

Other business lines offer some stability, but FNV can still benefit from rising gold prices directly - and potentially more quickly than its more extensive and diversified peers. That makes FNV one of the best gold stocks to buy now.

3. Royal Gold (NASDAQ: RGLD)

Royal Gold is a precious metals buyer and manager based in Denver, Colorado. It is primarily focused on extracting gold. With the company, investors can invest in precious metals without incurring the costs and risks typically associated with mining operations. In addition to owning 187 mining properties, Royal Gold also operates in 12 countries.

Stock in the precious metals sector has a market cap of $7 billion and earnings per share of $3.04. Stock in the precious metals sector has a dividend yield of $1.12. Shares of Royal Gold exchange hands more than 92,000 times daily, and the company generated $423 million in revenue in 2019.

The Royal Gold Company announced on September 21, 2020, that it has agreed to sell its shareholdings in the Peak Gold Project in Tok, Alaska, and Contango Ore Inc. Approximately $61.3 million in cash is being paid for the transaction. It is expected to close in October 2020.

4. Gold Fields Ltd. (GFI)

A gold miner with reserves in South America, Africa, and Australia, Gold Fields is listed on the New York Stock Exchange. As you can tell from the name, this corporation also explores copper deposits.

However, it is gold that interests them. GFI has interests in nine operational mines totaling about 2.24 million ounces of gold annually - or more than $4 billion at current prices. Those mines will not dry any time soon, as their estimated reserves total around 116 million ounces, translating into over 50 years at that output level. A historic gold miner with a bright future, GFI was founded in 1887.

5. Wesdome Gold Mines Ltd.

The Wesdome Gold Mines is a Canadian gold mining company in Ontario and Quebec. The company also exploits its Kiena Complex in Quebec and operates the Eagle River Underground Mine in Ontario.

Wesdome hopes to produce more than 200,000 ounces of gold from its two mining complexes. There are also shares of the company traded OTC in the United States under the ticker WDOFF. As of June 15, 2022, Frederic Mercier-Langevin will take on the company's chief operating officer (COO).

The most recent role that Mercier-Langevin held was that of general manager of Meliadine, a silver mine located in Canada's Nunavut territory. He has over 17 years of experience executing projects and managing operations with Agnico Eagle.

Picking the best gold stocks

Monetary policy and inflation are two factors that affect the gold price. For years, investors sought to mitigate these risks by investing in gold. A growing risk for investors is that gold and other precious metals could lose some of their luster due to the rise of cryptocurrencies.

Apart from that, gold mining companies are an excellent way to invest in the gold market. The reason is that gold prices are rising, and they can increase productivity and decrease costs. Top gold mining companies typically outperform gold prices as a result.

There are few risky gold mining projects among the top-tier gold miners, and their cost structures are low. Meanwhile, gold streaming companies are generally the best investment option for those interested in gold.

The companies are well-positioned to take advantage of higher gold prices without incurring the risks of mining physical gold.

Final thoughts

Despite the COVID-19 world health crisis, the gold mining industry was one of the few sectors of the economy to gain value. Gold stocks rose due to the rise in gold prices, as many companies adjusted to temporary mine closures worldwide. Remember, though, that certain stocks could decline for reasons unrelated to the industry. A gold industry that is not perfect can occasionally suffer from slumps.

Gold stocks may be a wise investment if gold prices continue to rise. In the event of a sharp decline in gold prices, additional opportunities may present themselves.


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