Gold stocks have been on an upward trajectory in the past few months as inflation climbs and the market becomes more volatile, pushing investors to seek safe haven in commodities like gold. However, the prices of the precious metal recently suffered their biggest drop in close to a month on April 19 as the the benchmark 10-year Treasury yield hit 2.942%, the highest since late 2018, and the US Dollar Index also rose to the highest it has been since March 2020 amid talks of another aggressive interest rate hike from the central bank.
James Bullard, the the chief of the Federal Reserve Bank of Saint Louis, forecast that a 75 basis point rise in rates was not entirely impossible, pointing out that the Federal Reserve had increased rates at more than this in the past. Charles Evans, the President of the Chicago Fed, has also claimed that the central bank needed to raise rates at above neutral rates. This would imply a range of 2.25% to 2.50%. Fed Chair Jerome Powell will likely announce a future course of action in this regard soon.
The drop in gold prices is surprising and caps a period of a series of daily gains. On April 12, the VanEck Gold Miners ETF (NYSE:GDX) had climbed nearly 3% to a 52-week high as gold prices increased for a fourth consecutive day to their highest in almost a month. Adam Koos of Libertas Wealth Management has said that gold benefits from the “tailwinds provided by spicy inflation numbers” but cautioned that the increase in prices had reached a “prelude to a peak”. Gold prices are up more than 6.8% year-to-date.
In this overall market environment, investors can pick up the shares of prominent gold stocks like Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Wheaton Precious Metals Corp. (NYSE:WPM) to profit from the boom. However, for those who cannot afford to go for these expensive offerings, there are several gold stocks that are trading in the penny stock range that provide the same bang for the buck. These are discussed in detail below along with their growth catalysts.
The companies that operate in the gold sector and are priced under $5 per share, as of April 22, were selected for the list. The business fundamentals and analyst ratings for these firms are also discussed to provide readers with some additional context for their investment choices. An extensive database of around 900 elite hedge funds tracked by Insider Monkey was used to quantify the hedge fund sentiment around each stock.
Gold Stocks Under $5
10. GoldMining Inc. (NYSE:GLDG)
Number of Hedge Fund Holders: N/A
Real-Time Share Price as of April 22: $1.54
GoldMining Inc. (NYSE:GLDG) is a Canada-based mineral exploration company. The company has nearly 16 million ounces of gold equivalent at different properties. It has also recently launched a $50 million ATM equity program to fund exploration efforts. GoldMining also holds a significant stake in royalties firm Gold Royalty Corporation. The firm owns around 15 projects in the United States, out of which 11 have resource estimates. Most of these projects are small. Only two have over 1 million ounces of gold equivalent.
GoldMining Inc. (NYSE:GLDG) is also ramping up investment in exploration. In a nine-month period ending August 2021, the company had invested close to C$1.4 million into gold exploration. The progress on these projects remains mixed at best.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in GoldMining Inc. (NYSE:GLDG) with 305,828 shares worth more than $368,000.
Just like Newmont Corporation (NYSE:NEM), Barrick Gold Corporation (NYSE:GOLD), and Wheaton Precious Metals Corp. (NYSE:WPM), GoldMining Inc. (NYSE:GLDG) is one of the stocks that gold investors have on their radar.
9. Fury Gold Mines Limited (NYSE:FURY)
Number of Hedge Fund Holders: 2
Real-Time Share Price as of April 22: $0.72
Fury Gold Mines Limited (NYSE:FURY) is an exploration and development firm. On April 12, the firm announced that it had entered into an agreement with investors in Canada and the US for a private placement of nearly 13 million shares at a price of $0.80 per share, hoping to raise nearly C$11 million from the process. The funds will be used for exploration efforts that the firm currently has underway, specially at the Eau Claire project in Quebec. The spare capital will be used for general corporate purposes.
Fury Gold Mines Limited (NYSE:FURY) has a market capitalization of around $103 million and a volume of 553,718. The short interest on the stock is almost 0.28%. The shares have climbed in value by nearly 10% in the past five months.
At the end of the fourth quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $191,000 in Fury Gold Mines Limited (NYSE:FURY), compared to 4 in the previous quarter worth $498,000.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Fury Gold Mines Limited (NYSE:FURY) with 284,709 shares worth more than $182,000.
8. Avino Silver & Gold Mines Ltd. (NYSE:ASM)
Number of Hedge Fund Holders: 3
Real-Time Share Price as of April 22: $0.83
Avino Silver & Gold Mines Ltd. (NYSE:ASM) engages in the purchase and exploration of mineral properties. The company posted earnings for the fourth quarter of 2021 on March 14, reporting a revenue of $9.3 million, up more than 560% compared to the revenue over the same period last year. The earnings for the firm, before interest and taxes, stood at nearly $4.8 million. Operating cash flows were $0.04 per share. Mine sequencing has led to a small drop in overall production output for the firm in the first quarter of 2022.
On April 14, Alliance Global Partners analyst Jake Sekelsky maintained a Buy rating on Avino Silver & Gold Mines Ltd. (NYSE:ASM) stock and raised the price target to $1.70 from $1.40, noting that the firm continued to deliver steady state production.
At the end of the fourth quarter of 2021, 3 hedge funds in the database of Insider Monkey held stakes worth $305,000 in Avino Silver & Gold Mines Ltd. (NYSE:ASM), up from 2 in the preceding quarter worth $249,000.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Avino Silver & Gold Mines Ltd. (NYSE:ASM) with 200,394 shares worth more than $173,000.