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COVID-19 has forced investors to shift their capital around, which has ended up benefitting gold, often regarded as a safe haven. The impressive level of performance that gold stocks have shown during the pandemic has ushered in a new, seemingly bullish period for the asset.
Numerous gold stocks have jumped in price over the past few months, reaching prices that haven’t been seen for a few years. Needless to say, investors have been riding high on the wave. The S&P 500 has provided returns of roughly 23%, while gold stocks have given investors approximately 40%.
It’s this kind of performance that has more investors considering gold. The pandemic has seen that the asset is worth considering going into the future. The following are three gold stocks to buy given the current momentum.
Good Gold Stocks to Buy in September 2020
Jaguar Mining is a Canadian gold mining company that runs multiple operations in Brazil, including development and exploration. It has over 25,000 hectares in the mineral-rich Iron Quadrangle in the central-southern part of Brazil, the second-largest gold land position in the region.
Like many other gold stocks, Jaguar Mining has about the best performance in a very long time. If investors had purchased the stock five years ago, they would have earned 326% on it — and the price appears to be continuing on an uptrend.
Revenue growth stood at 77.8% for Q2 2020, while recording $19.2 million in net income in the same quarter. The P/E ratio stands at 17.02.
2. Sandstorm Gold Ltd. (NASDAQ:SAND)
Sandstorm Gold is a Canadian metal company that funds other companies, in return for which it receives royalties. It works with smaller mining companies that operate in mineral exploration and mine development. Royalties take the form of net smelter returns and precious metals streaming contracts.
Sandstorm saw good growth in Q2 2020, with net income growth of 193.2%. P/E Ratio is on the high side at 221.43, but the stock has been doing its best in years, with signs of more growth going forward. Sandstorm is looking good for a medium-term investment — the consensus is that shorter-term performance may not be worthwhile, but on the scale of a few years, the investment looks better.
3. VanEck Vectors Gold Miners ETF (NASDAQ:GDX)
An exchange traded fund (ETF) is a good choice for those who are investing in gold stocks for the first time or for those who would prefer to keep their investments on the conservative side. It is one of the most liquid investment vehicles for investors and is a good way to gain initial exposure to gold.
Holdings in the VanEck Vectors Gold Miners ETF includes some of the most well-known names, such as Barrick Gold (ABX), Newmont (NEM), Franco-Nevada Corporation (FNV), and Newcrest Mining (NCM). In total, there are 53 businesses. As such, it is good for those who would like to avoid taking the risk of investing in a single company.
The increased demand for gold has led to VanEck’s assets increasing by $268 million from the start of 2020, now standing at $729 million. The net expense ratio is 0.53%, with one year and 3-year trailing returns at 44.49% and 19.22%, respectively.
Gold Looks Good Going into the Future
The pandemic is affecting all markets at the moment, but investors generally seem to show trust in the old faithful that is gold right now. Multiple stocks are showing signs of growth going into Q4 2020, while also seeing good revenue and profit.
It’s a good indication that people still believe in the safe haven quality of gold, which has been showing signs of flagging interest until the pandemic, at least among newer investors. Short and medium-term performance is generally being acknowledged as good, and in an uncertain post-pandemic future, it continues to hold value as a safe haven. While COVID-19 is accelerating Bitcoin adoption, many investors continue to prefer gold.
💡 Did you know: You could starting investing in gold stocks — and even Bitcoin — directly from your smartphone. See our exclusive report on the top stock market apps to get started.
What do you think about investing more in gold right now? Are investors wise in shifting more capital towards the precious metal? Let us know in the comments below.