Commodity Investing
Gold mining stocks might show some of the highest returns in 2020. The recent bear market has clawed most stocks down. And the bear might strike again, pushing stocks to new lows.
Yet most gold stocks are on the rise. Gold miners’ profitability climbs with the price of gold, which is up about 30% over the last year. Some investors have hedged their portfolios with the stocks I’m about to cover.
Before jumping in, I need to add an important note. Investing in the mining industry isn’t for the faint of heart. There’s a lot of market volatility. And performance often follows larger commodity cycles. I’ll discuss more of the investing risk below, so stick around. Also, if you’re interested, check out our free investment calculator. It’s a useful tool for showing how your investments can grow each year. Whether you’re investing in the best mining stocks or elsewhere, it comes in handy.
Top Gold Mining Stocks to Watch
The list below shows just three of the top gold mining stocks. If you want to see a larger list, you can check out our top 10 gold stocks. I’ve hand-selected the three below. These companies made the list based on their operating activities and pricing action…
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Barrick Gold
The top gold mining stock to watch in 2020 is Barrick Gold (NYSE: GOLD). The company has a more than $40 billion market cap. It’s one of the largest publicly traded gold companies. Its size and portfolio make it safer than the other companies on this gold stocks watch list.
In 2019, Barrick produced 5.5 million ounces of gold. That gold came from roughly 15 mining operations from around the world. This diverse portfolio of mines can lower geopolitical risk. Barrick also has 71 million ounces of proven and probable gold reserves.
Barrick’s proven reserves and steady production have helped with paying a dividend. Over the last 10 years, the company has rewarded shareholders with income each year. The dividend per share has bounced around and the current dividend yield is close to 1%.
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Kinross Gold
Kinross Gold (NYSE: KGC) has a market cap of about $8 billion. The company started in 1993 and has eight active gold mines. It’s based in Canada and has most of its operations throughout the Americas, although it also owns two mines in Russia.
In 2019, Kinross produced 2.5 million ounces of gold. That came right in line with production expectations. And going into 2020, the company has projected gold production of 2.4 million ounces. It’s a slight drop, but the increasing price of gold should more than offset the decline.
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Yamana Gold
The third best gold mining stock to watch in 2020 is Yamana Gold (NYSE: AUY). It’s the smallest company on this watch list. The market cap comes in at about $4 billion. And Yamana has six mining operations.
In 2020, Yamana plans to produce and deliver 857,000 ounces of gold. That’s much smaller than the other mines I’ve listed. Yamana also plans to produce 11.5 million ounces of silver this year. But overall, investing in Yamana is still riskier. And with the higher risk often comes higher reward. So, let’s dig a bit more into the volatility…
Gold Stocks Performance and Risk
As mentioned, the top gold mining stocks closely follow movements in the price of gold. It helps determine their profitability. So let’s look at a brief history of gold and recent trends.
Close to 10 years ago, the price of gold peaked at about $1,800 an ounce. Then, by 2015, it had dropped below $1,100. During that decline, it was a rough time to hold gold stocks. Investors lost billions. And it didn’t get much better leading up to 2018. The price of gold bounced around $1,200 and $1,300.
Then in 2019, gold broke out to the upside. It climbed from $1,300 to $1,500. And going into 2020, it’s climbed even higher. It’s come close to its previous high of $1,800. The market downturn has prompted investors to bid up the price of gold. Some investors view the shiny metal as an inflation and fear hedge.
Overall, gold has climbed much higher over the last year. And as the saying goes, the trend is your friend. New investments in gold mining stocks might see even higher returns over the coming months and maybe even years. However, be wary of long-term trend reversals.
To learn more about other investment opportunities, you can sign up for our free e-letter. It’s packed with insight from investing experts. Also, to see a larger list of gold stocks, check out this top 10 gold stocks list.
