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S&P 500   3,693.23
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MarketBeat: Week in Review 9/19 – 9/23
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China using civilian ships to enhance navy capability, reach
German leader seeks energy deals, alliances on Gulf trip
How to profit from the coming boom in gold (Ad)
Saudi Arabia's triumphant week reclaims the West's embrace
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S&P 500   3,693.23
DOW   29,590.41
QQQ   275.51
Become an Ethical Hacking and Cybercrime Expert
The 3-Stock Retirement Blueprint (Ad)
Will Wall Street's Enthusiasm About Datadog Lead To Big Gains?
MarketBeat: Week in Review 9/19 – 9/23
How to profit from the coming boom in gold (Ad)
China using civilian ships to enhance navy capability, reach
German leader seeks energy deals, alliances on Gulf trip
How to profit from the coming boom in gold (Ad)
Saudi Arabia's triumphant week reclaims the West's embrace
Kim Kardashian culls Dolce&Gabbana archives for Milan show
S&P 500   3,693.23
DOW   29,590.41
QQQ   275.51
Become an Ethical Hacking and Cybercrime Expert
The 3-Stock Retirement Blueprint (Ad)
Will Wall Street's Enthusiasm About Datadog Lead To Big Gains?
MarketBeat: Week in Review 9/19 – 9/23
How to profit from the coming boom in gold (Ad)
China using civilian ships to enhance navy capability, reach
German leader seeks energy deals, alliances on Gulf trip
How to profit from the coming boom in gold (Ad)
Saudi Arabia's triumphant week reclaims the West's embrace
Kim Kardashian culls Dolce&Gabbana archives for Milan show
S&P 500   3,693.23
DOW   29,590.41
QQQ   275.51
Become an Ethical Hacking and Cybercrime Expert
The 3-Stock Retirement Blueprint (Ad)
Will Wall Street's Enthusiasm About Datadog Lead To Big Gains?
MarketBeat: Week in Review 9/19 – 9/23
How to profit from the coming boom in gold (Ad)
China using civilian ships to enhance navy capability, reach
German leader seeks energy deals, alliances on Gulf trip
How to profit from the coming boom in gold (Ad)
Saudi Arabia's triumphant week reclaims the West's embrace
Kim Kardashian culls Dolce&Gabbana archives for Milan show

Gold Rush 2020: 3 Stocks to Capitalize on the Precious Metal’s Rally

Gold Rush 2020: 3 Stocks to Capitalize on the Precious Metal’s Rally

With the spot price of gold reaching new all-time highs of over $1,900 per ounce, it’s safe to say that the gold and precious metals market is heating up. Traditionally, gold is considered as a safe-haven asset or a hedge against the U.S. dollar, low-interest rates, and inflation. This could be one of the big reasons why we are seeing gold prices rally, as the U.S. dollar has shown some weakness lately. As economic conditions remain uncertain, we’ve already witnessed the U.S. Dollar Index (DXY) fall 3.6% in July. Meanwhile, the price of gold is up 8.6% in July and the rally could just be getting started.

 

Creating a well-balanced portfolio means exploring all of the different investment vehicles that are available, and that includes precious metals. This is especially important when we face a lot of economic uncertainty and elevated stock market risk. There are several ways that you can gain exposure to the gold and precious metals market, but buying gold stocks is certainly one of the most straightforward. Below, we are going to walk you through 3 stocks that can help you capitalize on the gold rally. 

 

Barrick Gold (NYSE: GOLD)

 

Instead of buying the actual physical gold bars or an ETF that tracks that price of gold, why not buy a company that literally extracts the shiny precious metal from the ground? Barrick Gold is one of the largest gold mining companies in the industry and the stock is already up over 60% in 2020. The company mentioned in a recent press release that its strong Q2 performance means that it will achieve its full-year production targets, which is great news for shareholders. After a recent merger with Randgold, Barrick Gold now has 31 million ounces of proven and probable gold reserves on hand.

 

The thing to note about gold miners is that when gold prices are increasing, the mining company experiences better profit margins since its costs of production essentially remain the same. That means gold miners tend to outperform physical gold during bull markets. On the other hand, they are known to be more volatile investments and have more downside risk than physical gold should gold prices drop. That’s why if you are looking for a gold mining company that could maximize your profit potential, Barrick Gold should be on your radar. 

 

Royal Gold (NASDAQ: RGLD)

 

Another interesting business model to look at if you are interested in gold is gold streamers. These businesses profit off of gold prices increasing without exposing your portfolio to the added risks and expenses of building and maintaining gold mines. A gold streamer will pay cash upfront to a mining company in exchange for the right to buy gold at a reduced price in the future. Gold miners benefit in this transaction by getting extra cash without having to go to capital markets while gold streamers profit by locking in great prices on physical gold. It’s a win-win for both parties, which is part of the reason why Royal Gold has been performing so well this year.

 

When you think about it, the fact that Royal Gold has low overhead costs and will have access to gold at reduced prices as the gold rally continues, it makes a lot of sense to consider investing. Shares hit new 52-week highs on Monday and the stock currently features a 0.82% dividend yield. The fact that this stock has delivered 19% CAGR in dividends per share since 2001 makes it all the more attractive. 

 

Newmont Corporation (NYSE: NEM)

 

Newmont is another great gold mining stock that is poised to benefit from rising gold prices. According to an investor presentation, it’s free cash flow increases by $400 million annually for every $100 move up in gold prices using a $1200/ounce base price. The company has been around for over 100 years and has a proven track record of creating one of the industry’s best portfolio of assets. It also recently rewarded investors with a 79% year-over-year dividend increase in Q1 2020.

 

This is the gold mining stock to look at if you want the best in the industry, as it is the only gold producer in the S&P 500. Newmont had a strong cash position of $3.7 billion at the end of Q1 and executed over $800 million in share buybacks as well. With gold prices continuing upwards, it wouldn’t be surprising to see Newmont provide investors with more dividend growth and earnings growth going forward. This stock might just be the best bet for riding out the gold rush.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Barrick Gold (GOLD)
2.1659 of 5 stars
$14.48-3.9%2.76%12.81Moderate Buy$26.74
Royal Gold (RGLD)
2.6667 of 5 stars
$88.20-4.0%1.59%21.05Moderate Buy$138.00
Newmont (NEM)
2.5608 of 5 stars
$41.25-2.9%5.33%41.67Hold$67.24
Compare These Stocks  Add These Stocks to My Watchlist 

7 Stocks to Buy to Outrun Rising Interest Rates

The latest Consumer Price Index (CPI) reading indicates that inflation may be peaking. But if you go to the grocery store or pay rent you're aware that prices aren't going down anytime soon. In fact, there's growing sentiment that inflation will be sticky.

What does that mean for interest rates? One part of the Federal Reserve's dual mandate is to keep inflation at or near its 2% target level. That means that it's reasonable to suggest that the Fed is not done with rate hikes.

Rising interest rates generally spell trouble for equity investors. Businesses, like consumers, are affected by higher interest rates. Not to be overly simplistic, but hiring borrowing costs means lower earnings. And that means a lower stock price.

However, some stocks manage rising interest rates better than others. In this special presentation, we look at seven stocks that are built to outperform when interest rates are rising. And what's even better, many of these stocks have business models that provide growth when the economy is firing on all cylinders.

View the "7 Stocks to Buy to Outrun Rising Interest Rates".

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