Most Lucrative Gold Stocks To Buy

Gold had a record high in 2011 when the value used to be $1,900 an ounce, caused by the immediate reaction by investors from coming out of the Great Recession.

However, 2015 and the start of 2016, has seen a new gold rush as prices have been soaring high.

The reasons for the price hikes are:

• Slow growth in China, which is spilling over into other international markets.
• The FED’s uncertainty on raising interest rates.
• Central banks, especially in countries like Japan, are offering very loose policies.
• Crude Oil price crash.

In a situation where there’s a lot of uncertainty in the world’s economy, investors look to gold as a haven.

While equity markets are struggling, gold-mining stocks have benefited from the renewed popularity.

In this article, we will look at the most lucrative Gold Stock Investments available as these are far less risky and offer higher returns – than what you would get from Gold ETF itself.

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ABX (Barrick Gold)

This gold producer is from Toronto, who have been experiencing significant growth.

This company was in debt of $13 billion from the beginning of 2015. However, in the last two years they've made tremendous efforts in cutting down their liabilities.

• Barrick Gold has acquired a lot of asset sales.
• It got involved with joint ventures.
• Cutting down costs.

On top of that, workers are motivated more than ever because they benefit from increasing gold prices; April’s performance showed a rise of 6.43%.

In 2011

Although 2011 had gold prices at $50 for Barrick (price levels are still way below that), it is still showing itself to be one of the fastest growing investments.

The president of Barrick, Kelvin Dushnisky, makes a future forecast:

2016 will continue to see improved productivity and lower operating costs, to reduce the debt further.

The burden may cause the balance sheet to be sensitive to gold prices and more levered – but the company’s debt performance in the last few years has raised a lot of confidence, and is one of the top investments to think about for 2016.

GG (Goldcorp)

Do not be fooled by GG’s drop in value by 30%, or losing over $192 million, over the whole duration of 2015 – as these figures have a deeper clue on why this is currently a shrewd investment.

Their latest earnings report has shown a rise in production by 40%, suggesting more efficient productivity – giving the potential to improve over time. Since the beginning of 2016 the stock has nearly doubled. Interest rate policy, market fears, and supply/demand have played a huge impact.

The benefits:

• Goldcorp has less need for capital than what it required in the past.
• The business has turned a positive cash flow of $243 million, a vast improvement from the negative $355 million reported 12 months ago.
• The rising gold prices have created more investor confidence for the company.

SBGL (Sibanye Gold)

This gold stock made a big start at the beginning of 2016, which saw a growth of a healthy 85%.

The gold mining business is set-up in South Africa, which has an estimated 28 million ounces of gold reserves (whilst Uranium has been around 103 million pounds.)

Experts do agree that Sibanye Gold has a lot more room for further returns, with its current market capitalization valued at $2.6 billion.

With the future still being brilliant with this investment, it is one to take notice.

GFI (Gold Fields)

This firm is now only halfway to rebuilding its stock valuation forecasted back in 2011. All-in costs are $942 per ounce, and the company has gained $47 million in cash flow – according to the last quarterly report published in December 2015.

The gold-mining business is still high in debt, but similar to ABX, Nick Holland the CEO has said:

The company will continue cost saving initiatives, and the brilliant international portfolio will offer more room for the balance sheets to grow for 2016.

What to watch out for with these stocks:

The actual price of gold will determine the future for those mining firms as there is still the risk of further economic improvement. When this becomes the case, then investors will start to move away from the gold haven, and will start looking further afield.

It is always sagacious to keep an eye on future economic forecasts, especially when the FED do start rising interest rates again – if this happens while companies like ABX are still heavily burdened with debt, then this may cause a crash.

Looking at the gold rush now:

However, looking at the risks, we know that the FED is still very reluctant on raising interest, so there are still bleak times ahead.

With comparisons to 2011, you can see the massive potential gains from gold stocks – and the majority of investors do seek this as a haven for the here and now.