We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Gold to Glitter More in a Falling Rate Environment: 5 Top Picks
Read MoreHide Full Article
Gold price has been soaring in the past two years following market participants’ expectation of a low-interest rate regime since mid-2023. On Sept. 22, spot gold price touched an all-time high of $2,664 per ounce. In the past year, gold price has jumped 42%. In the same period, the Dow, the S&P 500 and the Nasdaq Composite – have rallied 24.7%, 33.9%, and 38.4%, respectively.
Gold price is expected to maintain its northbound journey in the near future due to several reasons, which will be discussed below. Here we recommend five gold mining stocks for investors. These stocks are AngloGold Ashanti plc (AU - Free Report) , Eldorado Gold Corp. (EGO - Free Report) , IAMGOLD Corp. (IAG - Free Report) , Idaho Strategic Resources Inc. (IDR - Free Report) and Alamos Gold Inc. (AGI - Free Report) .
These stocks have strong growth potential for the rest of 2024 and have seen positive earnings estimate revisions for this year in the past 60 days. Each of our picks 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.
A Low Interest Rate Regime to Benefit Gold
The global economy is currently going through a low-interest rate regime. In the United States, the Fed reduced the benchmark lending rate by 50 basis points in its September FOMC meeting. This was the Fed’s first rate cut since March 2020. Earlier the European Central Bank also reduced rates by 25 basis points.
Central banks across the world are in the process of cutting interest rate in order to spur economic growth. Weak data for several key economic metrics also reduced yield on sovereign bonds. In the United States, the yield on the benchmark 10-Year U.S. Treasury Note fell from around 3.88% in December 2023 to around 3.74% this month.
A low market interest rate is beneficial for non-income-bearing bullions like gold. In the September FOMC meeting, the latest “dot-plot” showed that the Fed is expected to cut the fund rate by another 50 basis points by this year-end. If this happens, it will add further fuel to the yellow metal’s price increase.
Demand-Supply Imbalance to Favor Gold Price
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 hard to be identified. Gold mining is a very lengthy process by its nature. Moreover, slow-moving government clearances create more hurdles for miners.
On the demand side, several central banks of emerging economies are continuously buying the yellow metal. Moreover, the use of gold in energy, healthcare and technology is rising. India and China account for around 50% of consumers’ gold demand. Economic strength in India is fueling wealth-driven buying. Therefore, an eventual demand-supply imbalance is likely to drive gold prices.
Decreasing Dollar-Price Index and Geopolitical Conflicts
The U.S. Dollar Index (DXY), a gauge of the greenback against a basket of six major currencies, tumbled more than 4.8% in the past three months. A weak U.S. dollar has increased demand for dollar-denominated bullions like gold.
The prolonged geopolitical conflicts between Russia and Ukraine and intensified war between Israel and Hezbollah, and political unrest in some small South-East Asian countries are major concerns for global political atmosphere. In this situation, the price of gold should remain buoyant as the yellow metal is known as a safe-haven investment.
Buy These 5 Gold Stocks to Enrich Your Portfolio
At this stage, it will be prudent to invest in gold stocks with a favorable Zacks Rank for investment purposes.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
AngloGold Ashanti plc
Zacks 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 property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania.
AngloGold Ashanti has an expected revenue and earnings growth rate of 21.5% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 30 days.
Eldorado Gold Corp.
Zacks Rank #1 Eldorado Gold is engaged in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. EGO primarily produces gold, as well as silver, lead, and zinc.
EGO holds a 100% interest in the Kisladag and Efemçukuru mines located in Turkey, Lamaque complex located in Canada, and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania.
Eldorado Gold has an expected revenue and earnings growth rate of 28.5% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 30 days.
IAMGOLD Corp.
Zacks Rank #1 IAMGOLD is an international gold exploration and mining company based in Canada. IAG holds a 38% stake in the Sadiola Gold Mine and a 40% stake in the Yatela Gold Mine. Both are located in Mali, West Africa.
Measured and indicated resources at Sadiola and Yatela are 5.5 million ounces of gold (including reserves of 5.2 million ounces). Inferred resources are 5.9 million ounces. IAG is actively exploring highly prospective grounds in Africa and South America.
IAMGOLD has an expected revenue and earnings growth rate of 56.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 15.4% over the past 30 days.
Idaho Strategic Resources Inc.
Zacks Rank #2 Idaho Strategic Resources is a resource-based company, engaged in exploring for, developing, and extracting gold, silver, and base metal mineral resources in the Greater Coeur d'Alene Mining District of North Idaho.
IDR’s portfolio of mineral properties includes the Golden Chest Mine, a producing gold mine located in the Murray Gold Belt of North Idaho; approximately 1,500 acres of patented mineral property and approximately 5,000 acres of nearby and adjacent un-patented mineral property located within MGB, rare earth element projects located in the Idaho REE-Th Belt near Salmon, ID, and early-stage exploration properties in Central Idaho.
Idaho Strategic Resources has an expected revenue and earnings growth rate of 88.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
Alamos Gold Inc.
Zacks Rank #2 Alamos Gold is engaged in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. AGI primarily explores for gold deposits.
AGI holds 100% interest in the Young-Davidson mine and Island Gold mine located in Ontario, Canada, Mulatos mine located in Sonora, Mexico, and Lynn Lake project situated in Manitoba, Canada. AGI also holds interest in the Quartz Mountain project located in the Oregon United States.
Alamos Gold has an expected revenue and earnings growth rate of 27.6% and 41.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Gold to Glitter More in a Falling Rate Environment: 5 Top Picks
Gold price has been soaring in the past two years following market participants’ expectation of a low-interest rate regime since mid-2023. On Sept. 22, spot gold price touched an all-time high of $2,664 per ounce. In the past year, gold price has jumped 42%. In the same period, the Dow, the S&P 500 and the Nasdaq Composite – have rallied 24.7%, 33.9%, and 38.4%, respectively.
Gold price is expected to maintain its northbound journey in the near future due to several reasons, which will be discussed below. Here we recommend five gold mining stocks for investors. These stocks are AngloGold Ashanti plc (AU - Free Report) , Eldorado Gold Corp. (EGO - Free Report) , IAMGOLD Corp. (IAG - Free Report) , Idaho Strategic Resources Inc. (IDR - Free Report) and Alamos Gold Inc. (AGI - Free Report) .
These stocks have strong growth potential for the rest of 2024 and have seen positive earnings estimate revisions for this year in the past 60 days. Each of our picks 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.
A Low Interest Rate Regime to Benefit Gold
The global economy is currently going through a low-interest rate regime. In the United States, the Fed reduced the benchmark lending rate by 50 basis points in its September FOMC meeting. This was the Fed’s first rate cut since March 2020. Earlier the European Central Bank also reduced rates by 25 basis points.
Central banks across the world are in the process of cutting interest rate in order to spur economic growth. Weak data for several key economic metrics also reduced yield on sovereign bonds. In the United States, the yield on the benchmark 10-Year U.S. Treasury Note fell from around 3.88% in December 2023 to around 3.74% this month.
A low market interest rate is beneficial for non-income-bearing bullions like gold. In the September FOMC meeting, the latest “dot-plot” showed that the Fed is expected to cut the fund rate by another 50 basis points by this year-end. If this happens, it will add further fuel to the yellow metal’s price increase.
Demand-Supply Imbalance to Favor Gold Price
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 hard to be identified. Gold mining is a very lengthy process by its nature. Moreover, slow-moving government clearances create more hurdles for miners.
On the demand side, several central banks of emerging economies are continuously buying the yellow metal. Moreover, the use of gold in energy, healthcare and technology is rising. India and China account for around 50% of consumers’ gold demand. Economic strength in India is fueling wealth-driven buying. Therefore, an eventual demand-supply imbalance is likely to drive gold prices.
Decreasing Dollar-Price Index and Geopolitical Conflicts
The U.S. Dollar Index (DXY), a gauge of the greenback against a basket of six major currencies, tumbled more than 4.8% in the past three months. A weak U.S. dollar has increased demand for dollar-denominated bullions like gold.
The prolonged geopolitical conflicts between Russia and Ukraine and intensified war between Israel and Hezbollah, and political unrest in some small South-East Asian countries are major concerns for global political atmosphere. In this situation, the price of gold should remain buoyant as the yellow metal is known as a safe-haven investment.
Buy These 5 Gold Stocks to Enrich Your Portfolio
At this stage, it will be prudent to invest in gold stocks with a favorable Zacks Rank for investment purposes.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
AngloGold Ashanti plc
Zacks 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 property is a 100% owned Geita mine located in the Lake Victoria goldfields of the Mwanza region in north-western Tanzania.
AngloGold Ashanti has an expected revenue and earnings growth rate of 21.5% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 30 days.
Eldorado Gold Corp.
Zacks Rank #1 Eldorado Gold is engaged in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania. EGO primarily produces gold, as well as silver, lead, and zinc.
EGO holds a 100% interest in the Kisladag and Efemçukuru mines located in Turkey, Lamaque complex located in Canada, and Olympias, Stratoni, Skouries, Perama Hill, and Sapes gold mines located in Greece, as well as the 80.5% interest in Certej development projects located in Romania.
Eldorado Gold has an expected revenue and earnings growth rate of 28.5% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 30 days.
IAMGOLD Corp.
Zacks Rank #1 IAMGOLD is an international gold exploration and mining company based in Canada. IAG holds a 38% stake in the Sadiola Gold Mine and a 40% stake in the Yatela Gold Mine. Both are located in Mali, West Africa.
Measured and indicated resources at Sadiola and Yatela are 5.5 million ounces of gold (including reserves of 5.2 million ounces). Inferred resources are 5.9 million ounces. IAG is actively exploring highly prospective grounds in Africa and South America.
IAMGOLD has an expected revenue and earnings growth rate of 56.7% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 15.4% over the past 30 days.
Idaho Strategic Resources Inc.
Zacks Rank #2 Idaho Strategic Resources is a resource-based company, engaged in exploring for, developing, and extracting gold, silver, and base metal mineral resources in the Greater Coeur d'Alene Mining District of North Idaho.
IDR’s portfolio of mineral properties includes the Golden Chest Mine, a producing gold mine located in the Murray Gold Belt of North Idaho; approximately 1,500 acres of patented mineral property and approximately 5,000 acres of nearby and adjacent un-patented mineral property located within MGB, rare earth element projects located in the Idaho REE-Th Belt near Salmon, ID, and early-stage exploration properties in Central Idaho.
Idaho Strategic Resources has an expected revenue and earnings growth rate of 88.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 30 days.
Alamos Gold Inc.
Zacks Rank #2 Alamos Gold is engaged in the acquisition, exploration, development, and extraction of precious metals in Canada and Mexico. AGI primarily explores for gold deposits.
AGI holds 100% interest in the Young-Davidson mine and Island Gold mine located in Ontario, Canada, Mulatos mine located in Sonora, Mexico, and Lynn Lake project situated in Manitoba, Canada. AGI also holds interest in the Quartz Mountain project located in the Oregon United States.
Alamos Gold has an expected revenue and earnings growth rate of 27.6% and 41.5%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days.