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Buy 5 Gold Miner Stocks as Yellow Metal Price Regains Some Lost Ground
Buy 5 Gold Miner Stocks as Yellow Metal Price Regains Some Lost Ground
About this update from Drdgold Ltd.
On Feb. 3, the price of spot gold recovered some lost ground after closing above $5,000/Oz. The price of the yellow metal declined sharply after hitting a record-high of nearly $5,600/Oz on Jan. 29. Heightened geopolitical conflicts and a declining U.S. dollar supported recovery. A weak U.S. dollar has increased demand for dollar-denominated bullion like gold.Meanwhile, gold prices are witnessing a solid northward journey this year, benefiting stocks associated with the yellow metal mining. Year to date, gold price has risen nearly 15%. At this stage, it should be prudent to invest in gold mining stocks with a favorable Zacks Rank. Five such stocks are: AngloGold Ashanti plc AU, Gold Fields Ltd. GFI, New Gold Inc. NGD, DRDGOLD Ltd. DRD and Gold Royalty Corp. GROY. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Other PositivesThere were several reasons behind the surging gold prices. The central banks of many emerging economies have been buying the yellow metal. Central banks are bolstering their gold reserves following rising global debt levels, President Donald Trump’s trade and tariff-related uncertainties and lingering geopolitical risks.Central banks across the world are in the process of cutting interest rates in order to spur economic growth. A low market interest rate is beneficial for non-income-bearing bullions like gold. Gold is gaining ground on a supply-demand imbalance. The World Gold Council said that the gold mining industry is suffering from a scarcity of deposits of the yellow metal. As gold miners have already explored prospective areas, new mines are very hard to identify. Gold mining is a lengthy process by nature. Moreover, slow-moving government clearances create hurdles for miners.On the other hand, the use of gold in energy, healthcare and technology is rising. Therefore, an eventual demand-supply imbalance is likely to drive gold prices. Market participants are optimistic about the gold mining industry’s prospects. The chart below shows the price performance of our five picks in the past month.AngloGold Ashanti plcZacks Rank #1 AngloGold Ashanti operates as a gold mining company in Africa, Australia, and the Americas. AU primarily explores for gold, as well as produces silver and sulphuric acid as by-products. AU’s flagship prop...