Top 3 Crisis-Proof Gold Stocks Right Now

29/01/2016

Summary

  • Gold stocks have plunged in the aftermath of a vicious downtrend in gold prices.
  • Most stocks have struggled to report any positive bottom lines in the last few years.
  • Few gold stocks appear to have shaken the pressure exerted by declining gold prices to net positive incomes for the trailing 12-month period.
  • Some of these stocks also enjoy impressive dividend yields while others have enough room to grow dividends as demonstrated by their low payout ratios and strong profit margins.
  • The price of gold appears to be stabilizing, but it has proved to be relatively unpredictable over the last few months.

Randgold Resources (NASDAQ:GOLD) has gained more than 6% over the last five days with a majority of that gain coming this week due to the rise in gold price, which hit a new 3-month high on Tuesday.

Most gold stocks posted massive gains during the day with the likes of Newmont Mining (NYSE:NEM) adding more than 5% to their market value while Randgold was up nearly 5%.

However, the price of gold eased on Wednesday to give up some of the gains garnered in the previous trading session to trade at just below the $1,120 level.

On the other hand, the SPDR Gold Shares ETF (NYSEARCA:GLD) has gained nearly 2% since the start of the week. On Tuesday, the ETF also reached a new 3-month high of $107, a level it touched last, at the start of November last year.

Gold bears believe that the maiden rise in trading gold price over the last two days was nothing more than a sucker rally, but the bulls believe that with equities falling and the USD finally running out of steam, the price of gold could be turning a crucial corner following an extended period of decline.

Right now, investors are caught in the dilemma of choosing amongst investing in gold via trading platforms, buying gold bullion like governments are doing, or opting for gold stocks. With gold stocks, you can capitalize on more than just the increase/decrease in stock prices in the form of dividends, or share buybacks if the company has such a program.