The S&P/TSX Composite Index is at 20,052.25 points right now, down significantly from its all-time high of 20,897.57 points that the benchmark index hit just last month before it began its decline. The stock market index was on a constant upward trajectory before this pullback hit, and investors were on the search for Canadian growth stocks that could help them turn a good profit.
The current environment calls for a different approach if you are worried about an extended pullback. This pullback is not as severe or rapid as in February and March 2020, but it could go on for longer than the pandemic-fueled selloff frenzy.
Gold has a reputation for being the go-to safe-haven asset during broader pullbacks and uncertainty in the economy, because the rare yellow metal’s price tends to go up when the rest of the economy is on a downward trajectory. While it remains to be seen how long this trend will continue, investors worried about their capital might want to reposition their portfolios to capitalize on the downturn rather than continue suffering substantial losses.
Today, I will discuss two gold stocks that could be ideal additions to your portfolio and provide you with massive value right now.
Kirkland Lake Gold
Kirkland Lake Gold (TSX:KL)(NYSE:KL) is a top gold stock that spiked by 8% in intraday trading on September 27 before declining again. At writing, the stock is trading for $52.38 per share, down by 5.96% since its sudden spike. Its sharp rally was attributed to increasing rumours about its possible merger and acquisition deals with several companies that could unlock the gold stock’s value.
The rumours turned out to be true when its Canadian rival Agnico Eagle Mines announced that it will acquire Kirkland Lake for an estimated $13.5 billion, surprisingly causing its share prices to slip. However, the move could turn out to be a massive boost to the company, as its major mining operations combine with Agnico Eagle Mines to put the merged company in a profitable financial position.
Long-term investors could be in for significant shareholder returns, as the stock becomes one of the world’s top gold producers after the merger pulls through.
Equinox Gold
Equinox Gold (TSX: EQX) is easily the best growth stock in the gold mining industry, making it an excellent long-term investment. The company is growing its production rapidly, and it is trading for a massive discount right now. At writing, the stock is trading for $8.42 per share, and it is down by a massive 40.66% year to date.
Between its long-term growth potential and discounted share prices, it could be an attractive asset for investors with a long investment horizon to consider adding to their portfolios. The company only began production in 2018. By 2019, it produced 200,000 ounces of gold, and it is expected to produce just under 600,000 ounces of gold in just its third year. By 2024, the company expects to produce over a million ounces of gold each year.
Investing in Equinox Gold stock could set you up for significant short-term gains if gold prices rise and long-term gains due to its rapid growth.,
Foolish takeaway
The broader decline in the stock market has not done much to affect gold prices, which reflects in the lack of upside shown by gold stocks like Kirkland Gold and Equinox Gold. However, both gold stocks have the potential to outperform the stock market in the near term. Accordingly, these two gold stocks would be ideal to have on your radar today so that you can add them to your portfolio before share prices in the sector begin to climb.
