When it comes to gold investment in Canada, it pays to keep an eye on what’s happening south of the border.
Changing course from its proposed triple rate hikes this year, the U.S. Federal Reserve is now seriously considering slashing rates perhaps more than once before 2019 is out.
Needless to say, flipping the switch on rates has been good for the gold market, pushing prices up and lining investors’ pockets.
But which gold stock should a new precious metals investor be snapping up today? A big and beautiful mega-miner or a hungry and aggressive upstart?
With two of the former such companies in a neck and neck race for your investment and any number of the latter all but promising to reward investors with some staggering upside, there is a bull case for gold right now that’s more persuasive than almost any other area of TSX investing.
This is emerging as the best gold stock on the TSX
Barrick Gold (TSX: ABX)(NYSE: GOLD) is looking good right now – better than its biggest competitor in some ways. Having snapped up Rangold Resources, Barrick Gold now holds the potential now to climb much higher, almost doubling in the last 12 months.
Its balance sheet is sturdy, its reserves are extensive, and it’s still good value for money. In short, if you’re looking for a growth stock in the gold space, this one could run and run.
It’s looking preferable to Newmont Goldcorp (TSX: NGT)(NYSE: NEM) at the moment. The newly merged behemoth of a gold stock just posted a miss on its earnings, with the share price for the latter miner taking a dip on the news.
Perhaps a little ironically, some of the costs accrued through the Nevada Joint Venture with Barrick Gold have been cited as driving factors behind the broad second-quarter miss.
A top mining stock to hold during market turbulence
However, it should be pointed out that Newmont Goldcorp saw a substantial lift in revenues, with year-on-year takings up 36% thanks in large part to the merger earlier in the year. Gold production also rocketed on the year by an impressive 37%.
Commenting on the mixed Q2, CEO Gary Goldberg said, “The Goldcorp integration process is well underway and on track to deliver an additional $365M in annual cash flow,” which should help reassure shareholders.
Meanwhile, Barrick Gold has more big plans up its sleeve, with the offer to own Acacia Mining outright attracting attention.
While Barrick Gold currently owns 63.9% of Acacia Mining by buying out the remaining share, Barrick Gold would be closer to streamlining its operations in Africa under the leadership of CEO Mark Bristow, such as pushing through a standstill with the government of Tanzania.
The bottom line
After years in the doldrums, gold is re-emerging as a go-to haven for nervous investors. With any number of potentially disruptive stressors facing international markets, a reliable safe haven is the Holy Grail for investors seeking to hide their cash in an asset class that can grow their wealth during increased market turbulence.
As gold prices rise, holding related mining stocks at least until this time next year could see a significant return on an investment.
