Investors who have not been following the news properly might not be aware that investing in gold is becoming popular again. Gold prices have been soaring for the past few weeks, and the rare yellow metal continues to soar in value. As of this writing, it is hovering around new all-time highs, making it important to take a good look at this safe-haven asset.
Gold prices typically move in the opposite direction to the rest of the market. When markets are going down, gold tends to rise in value. However, markets worldwide are soaring. Why is gold still rising? That could be due to the concerns people have about the overall global banking system’s stability. Trade tensions, inflation, and the fact that gold is priced in US dollars can make for a meaningful impact for investors interested in gold as a hedge against downturns.
However, leveraging rising gold prices does not mean you must take money out of the market and buy bullion. In this article, I will highlight two high-quality Canadian gold mining stocks that can let you stay liquid, capitalize on rising gold prices, and keep your capital within the market.
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Dundee Precious Metals
Dundee Precious Metals Inc. (TSX:DPM) is a $4.6 billion market-cap international gold mining company that engages in acquiring mineral properties, and exploring, developing, and processing metals. The company’s Chelopech segment, in particular, is responsible for gold production. It’s Ada Tepe segment also produces gold in Bulgaria, while its Tsumeb segment runs its smelter operations.
As of this writing, DPM stock trades for $27.60 per share, up by over 110% from its 52-week low. If gold prices rise even higher, which is a realistic expectation, buying DPM stock at current levels could become an enticing bargain. DPM stock boasts impressive free cash flows, has an excellent mergers and acquisitions strategy, and offers quarterly dividends to its investors. DPM stock can be an excellent investment for investors who want to leverage the strength of gold.
Agnico Eagle Mines
Agnico Eagle Mines Ltd. (TSX:AEM) is one of Canada’s top gold-producing companies. The $105.8 billion market-cap company engages in exploring and producing gold through several segments. Formerly known as Kirkland Lake Gold, this gold-mining stock has been on my radar for a long time. The mega merger that saw it become the second-largest gold producer by market cap made it an even more attractive holding for me.
Shares of the combined entity have reached unimaginable levels. As of this writing, AEM stock trades for $210.42 per share, up by over 100% from its 52-week low. It should come as no surprise that rising gold prices have contributed to the stellar rise in share prices. Between the high-quality gold mines producing high volumes of the precious metal and the rising gold prices, reaching such high valuations was bound to happen. If gold rises higher, it can deliver even greater returns to investors in the coming weeks.
Foolish takeaway
If you are interested in taking advantage of higher gold prices but are not willing to take your money out of the market entirely, it might be a good idea to invest in assets linked to the precious metal instead. This way, you can keep your capital within the market, ready to liquidate and move to other assets as the market situation changes. It is important to remember not to place all your bets on one or two things. Diversifying your allocation can be a great way to protect your capital from unexpected situations. Even if you are investing in gold bullion, it might be worth setting aside a portion of your money to keep within the market through a portfolio of gold-related stocks. To this end, DPM stock and AEM stock can be good investments to consider.
