In case you missed it, a massive gold reserve was discovered in the Chinese province of Hunan. The precious metal cache could be worth around US$83 billion, making it one of the most significant gold discoveries of all time. Undoubtedly, the find could have some pretty major implications on the price of gold. And though it means a ton of new supply found itself on the market, the price of gold responded pretty positively to the news event.
Why? China could really ramp up its gold reserve over the next few years. And as other nations also look to give their reserves a jolt, there’s a good chance that the big discovery could act as yet another bullish catalyst for gold over the long run.
Indeed, it may have come as a surprise to some gold price watchers that gold held up rather steadily in reaction to the find.
As an increasing number of investors look to take advantage of the post-election pullback in gold prices to hedge their bets or a potential return of inflationary pressures (some steep tariffs between the U.S. and Canada could be enough to do it), I wouldn’t be at all surprised in the slightest if gold were to make a move towards the US$3,000-per-ounce level. Indeed, there are numerous potential drivers for the price of gold, the big Chinese discovery being one of them.
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Plenty of shining stars in the gold scene following China’s big find!
For investors looking to bet on gold miners at a discount, there’s no shortage of options here on the TSX Index. Indeed, it’s rich with cheap gold miners, many of which could stand to rise if gold is in for another big year of gains.
Though betting on a gold exchange-traded fund (ETF) is a smart bet to beef up your exposure to the shiny yellow metal, I’d argue that the best-in-breed operators may be a better bet.
Indeed, Agnico Eagle Mines (TSX: AEM) is one of the top Canadian gold miners that comes to mind for investors seeking quality and a good amount of upside momentum going into 2025. The stock has been performing incredibly this year, up by well over 60% year to date. And if that wasn’t good enough, there’s also a 1.9% dividend yield to keep investors happy once the rally eventually runs out of steam.
Personally, I think the dividend alone is enough to make shares of AEM a top pick for those looking to beef up their portfolio’s gold reserves before market participants have a chance to return to risk-off mode.
China gold miners look intriguing.
There’s also a way to get investors who want exposure to gold mining in China on the TSX. China Gold International Resources (TSX: CGG) stands out as a shining mid-cap ($2.775 billion market cap right now) after enjoying a robust 20% rally year to date. Indeed, it’s a lesser-known name in the space but a pretty undervalued one that I believe could be in for increased attention as more gold investors grow enthused over the possibility of China continuing to add to its reserve stockpile.
The company operates two big mines in China, both of which could hold promise over the long haul. As the firm looks to keep on producing in the face of higher gold prices, I’d be inclined to watch shares as they surge past $7 per share.
