The global economy is facing turbulence, with trade policies and market shifts creating uncertainty. Investors are once again looking at precious metals as a safe haven. Gold has historically been a hedge against inflation, currency devaluation, and economic instability. Its recent price surge has reinforced its reputation as a valuable asset during uncertain times.
As a result, gold stocks on the TSX are attracting attention from investors looking for stability and potential growth. So let’s look at two TSX stocks investors might want to consider
Franco-Nevada
Franco-Nevada (TSX:FNV) is one of the largest gold-focused royalty and streaming gold stocks in the world. Unlike traditional mining companies, it does not operate mines or bear the high costs and risks of exploration. Instead, it provides funding to miners in exchange for royalties or the right to purchase metal at a fixed price. This allows it to generate consistent revenue while avoiding operational challenges.
In its most recent earnings report, Franco-Nevada reported a net income of US$175.4 million for the fourth quarter of 2024, equal to $0.91 per share. The gold stock’s revenue also remained strong, reflecting the benefits of its diversified portfolio and strategic investments. Its stock recently reached a new 52-week high of $148.02, demonstrating investor confidence in its business model and long-term growth potential.
Allied Gold
Allied Gold (TSX:AAUC) is another TSX-listed gold stock that has been making significant strides in the industry. It operates gold mines in Mali, the Ivory Coast, and Ethiopia, positioning itself as a major player in the sector.
Unlike Franco-Nevada, Allied Gold is involved in direct mining operations, giving it full exposure to the ups and downs of production costs and commodity prices. Despite reporting a net loss of US$0.43 per share in its third-quarter earnings, this was an improvement from the previous year’s US$0.98 per share loss.
The company’s revenue for the trailing 12 months stands at US$739.2 million, reflecting its scale and growth potential. In the fourth quarter of 2024, Allied Gold announced record gold production, increasing output by 16% compared to previous quarters. This growth in production is a positive sign for the company’s future profitability and ability to generate shareholder value.
Foolish takeaway
Gold’s appeal is largely driven by its ability to hold value when traditional markets face pressure. The resurgence in demand has been fuelled by global trade concerns, inflation fears, and economic policy changes. Investors seeking exposure to gold can take different approaches.
Franco-Nevada’s royalty model provides a lower-risk way to invest in the gold industry, benefiting from rising prices without the uncertainties of operating mines. Allied Gold, with its direct involvement in mining, offers higher potential rewards but also comes with greater operational risks. Both gold stocks are positioned to capitalize on rising gold prices, making them attractive options for investors looking to navigate the current economic landscape.
The broader market continues to adjust to shifting global conditions, and gold remains a key asset for those seeking financial security. Investors should consider their risk tolerance and investment goals when deciding how to gain exposure to the precious metals sector. Companies like Franco-Nevada and Allied Gold offer two distinct paths, each with its advantages and challenges. Whether through a royalty-based strategy or direct mining operations, gold remains a compelling investment as uncertainty continues to shape the markets.
