Three gold miners that can ride out demand weakness

When gold prices bounce back, these stocks are set to shine.

Vikram Barhat 1 August, 2018 | 5:00PM

As uncertainty roils the stock market and equity valuations get stretched, some investors are taking another look at gold as a safe-haven investment and a stable store of value.

Gold bugs are predicting a strong year for the yellow metal as its attractiveness remains intact for a range of investors around the world. The precious metal started on a strong note, and although it lost some of its sheen in the second quarter, it's predicted to average US$1,360 an ounce this year, up 8% from the year before, regaining its 2013 peak. Further, the demand for gold in China and India -- two of its biggest markets -- has been rebounding.

For now, though, declining gold prices appear to be dragging down stocks of gold producers. On a year-to-date basis, gold has fallen 6%, and the S&P Commodity Producers Gold index is down nearly 8%, while the S&P 500 has gained 6% and the S&P/TSX Composite Index has added 4%, as of July 20, 2018. These declines have opened up attractive entry points for opportunistic investors looking to buy and hold until gold prices start to strengthen, pushing up gold miners' profitability and stock prices.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Agnico Eagle Mines Ltd104.78 CAD-0.12
Barrick Gold Corp35.49 CAD-0.25

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies