First off, I cannot be the only one who immediately thinks of Goldmember from Austin Powers when reading these articles. But whether you “love goooold” or just love the returns from it, it cannot be denied that right now is an excellent time to buy up the commodity.
The price of gold has hit record highs again and again, and could be headed towards US$3,000 per ton. So let’s look at why this is even happening, and whether or not investors will want to consider the material both now, and for the future.
What happened
The gold run certainly comes from the rise in interest rates, making gold more attractive to hold as it’s a nonyielding asset. Further, there continues to be hopes from even more growth. More uncertainty from the Federal Reserve in the United States would only leave the price climbing higher. And as there is doubt the Fed will go through an aggressive rate cut program in 2024, that could lead to even higher prices.
But the growth outlook goes beyond the Fed. An easing cycle is one thing, but global growth remains weak and inflation is up. These are also reasons for many to seek out gold as a safe asset. But if you’re fearful about gold falling once more, there’s yet another reason to consider the yellow metal.
The demand remains incredibly high from China, with a high appetite from retail gold markets, as well as in India. Add in the potential for more geopolitical tensions to cause further volatility, and you’ve got an even higher gold price for safekeeping.
A gold stock to buy
With this in mind, there are two gold stocks I would consider picking up in this strong gold environment. First up, there’s Ivanhoe Mines (TSX: IVN). This stock is known for enormous projects with a focus on Africa. There, it offers gold investments, with a strong future outlook as the company continues to contribute to the ongoing need for the commodity.
However, there’s another reason to consider IVN stock. That’s the company’s copper investment. Its Kamoa-Kakula copper project is one of the largest, highest-grade copper discoveries in the world. And it’s also sorely needed. There is a risk of a copper shortage, a product needed for every type of electrical conduction application, from computer grids to copper wiring.
With that in mind, it’s no wonder after strong production in the first quarter the company’s shares hit 52-week highs. Shares are now up 37% in the last year, and yet analysts believe even more is on the way for this gold and copper stock.
Kinross Gold
Another company investors should certainly consider is Kinross Gold (TSX: K), especially as more of a pure play in among gold stocks. Kinross gold operates mines in the Americas, West Africa, and of course Canada as well as the United States.
One large project it’s focusing on now is the Great Bear project as well as the Many Choh project in Canada and Alaska, respectively. These two could see immense near-term production potential, with even more coming out of American mines.
Shares are already up as the company reported incredible production for 2023. And now with quarterly earnings coming up in May, investors have even more reason to consider this stock as it rises higher. K stock is already up 28% in the last year alone.
