Although precious metals-related investments have been relatively disappointing over the trailing two years, the best gold stocks to buy could make a significant comeback due to myriad factors, most notably inflation.
Recently, Treasury Secretary Janet Yellen made a stunning admission, declaring that she misread the threat that rising prices would pose to the economy. This is in regards to her comments from March 2021, when Yellen described inflation as a “small risk.”
Today, though, we know better. Gasoline prices have soared through the roof, while the cost of everything else has also jumped conspicuously. And with wages not keeping pace with the cost spikes, households have few options other than to tighten spending. Naturally, this dynamic poses hardships on companies that depend on strong consumer sentiment, thus raising the specter of mass layoffs.
In fact, several companies have already announced planned reductions in their workforce. Others are approaching the hiring process in a more calculated manner, meaning that the best gold stocks to buy can benefit from the fear trade. Circumstances don’t look too bright, forcing many to seek the universal safe haven.
Of course, no one asset class is perfectly safe. Still, with so much uncertainty ahead, it’s time to consider these seven best gold stocks to buy.
|AEM||Agnico Eagle Mines||$53.15|
|WPM||Wheaton Precious Metals||$41.67|
Gold Stocks to Buy: Newmont (NEM)
Since the precious metals mining sector can be incredibly volatile, it pays to focus the bulk of your commodities-focused portfolio on established entities. Under this context, you probably can’t go wrong with Newmont (NYSE:NEM), a company that features the largest gold reserve base in the metals mining industry. As such, acquiring shares of NEM yields far more convenient exposure to gold than lugging around physical bullion.
Better yet, Newmont has been delivering the goods financially. In the first quarter of 2022, it posted sales of $3 billion, up over 5% from the year-ago quarter. Operationally, the company produced 1.34 million attributable ounces of gold and 350,000 attributable gold equivalent ounces from co-products. Just as significantly, management stated that it’s on track to achieve full-year guidance ranges.
Overall, NEM is up more than 9% on a year-to-date (YTD) basis and appears to be working through prior volatile sessions. For a combination of strong fundamentals and capital gains potential, NEM is one of the best gold stocks to buy for fighting inflation.
Barrick Gold (GOLD)
Commanding a market capitalization of nearly $37 billion, Barrick Gold (NYSE:GOLD) is a powerful and influential player in the mining industry. Barrick has operating sites in 18 different countries, enabling shareholders to enjoy a diversified footprint. In addition to its namesake asset, the company is a major copper producer, a metal that has significant implications for the future, particularly if electric vehicles become widely integrated.
In its Q1 earnings report, Barrick reported revenue of $2.85 billion, down more than 3% from the year-ago level. According to the company’s financial disclosure presentation, it suffered a depletion of higher-grade ore due to a mechanical mill failure. As well, Barrick suffered from higher energy prices and global supply challenges due to Russia’s invasion of Ukraine.
Still, these might be temporary setbacks. Notably, management disclosed that Barrick’s gold production would probably be weakest in Q1. Most critically, it stood by its 2022 guidance for gold and copper production. Therefore, investors should be able to trust GOLD as one of the best gold stocks to buy.