Gold has surged to a new all-time high, rising 33.5% over the past year to $2,583.64/oz. This is driven by easing inflation and expectations that the Federal Reserve will cut interest rates after recent data signaled a slowing U.S. economy. As inflation nears the Fed’s 2% target, gold has become a go-to haven for investors looking to protect against potential economic turbulence. Silver has also followed suit, gaining just over 32% during the same period.
The weakening of the U.S. dollar, coupled with the anticipation of the Fed cutting interest rates this week, has pushed the price of gold higher. As a result, the popular SPDR Gold Shares ETF (NYSE: GLD) recently broke out of a multi-week consolidation phase and reached new all-time highs, bringing its YTD gains to an impressive 24.8%.
With gold’s strong performance and the potential for continued upside, investors may look to capitalize on this momentum through gold-related stocks. Here are three options that could offer exposure to this trend.
SPDR Gold Shares ETF: A Simple Way to Invest in Gold
The SPDR Gold Shares ETF is one of the most popular and straightforward options for investors seeking exposure to gold's price movements. The ETF directly reflects the performance of gold bullion minus the Trust's expenses, which come in at a net expense ratio of 0.4%. This low cost makes GLD an attractive vehicle for gold exposure without the need to physically own or store the metal.
GLD has been riding gold’s upward momentum, up almost 25% YTD. It recently reached new all-time highs, marking a significant move for the ETF. In terms of flows, GLD has attracted strong investor interest, with positive one-month net flows of 2.9% and three-month net flows of nearly 5%. This indicates that more investors are moving into the ETF, suggesting that the rally may still have room to run.
Newmont: The Largest Gold Mining Stock in the U.S.
Newmont (NYSE: NEM) is the largest gold mining stock in the U.S. by market capitalization, standing at over $61 billion. As a global leader in gold production, Newmont also has interests in other metals like copper, silver, and zinc, making it a diversified player in the mining industry. The company’s operations span the globe, with assets in the U.S., Canada, Australia, and South America.
NEM offers investors both growth and income potential, thanks to its 1.88% dividend yield, which provides steady cash flow even as its share price appreciates. The stock has performed exceptionally well in 2024, up nearly 30% YTD, and it currently trades just 2% away from its 52-week high. Analysts remain bullish on the stock, giving it a Moderate Buy rating based on 16 ratings. This bullish sentiment is partly driven by Newmont’s projected earnings growth of 20.57% for the year, a significant factor supporting further upside.
Newmont’s Q2 2024 earnings report was strong, with earnings per share (EPS) of $0.72, beating analysts' estimates by $0.10. The company’s quarterly revenue of $4.4 billion also exceeded expectations, marking a 64.1% year-over-year increase.
Barrick Gold: A Global Leader in Gold and Copper Production
Barrick Gold (NYSE: GOLD), headquartered in Canada, is another global leader in gold production. The company has a market capitalization of nearly $36 billion and operates mines across North and South America, Africa, and Australia. While gold remains its primary focus, Barrick also has significant copper operations, providing exposure to an additional commodity with strong global demand.
The stock has a 1.95% dividend yield, offering a consistent income stream alongside its growth potential. Barrick’s stock is up 13.4% YTD, and like Newmont, it is trading close to its 52-week high, just 2.8% away. Analysts are optimistic about Barrick, giving the stock a Moderate Buy rating, with a consensus price target that implies nearly 14% upside.
In its most recent earnings report, Barrick posted EPS of $0.32, beating consensus estimates of $0.27. The company’s revenue also exceeded expectations at $3.16 billion, marking an 11.6% increase year-over-year. Barrick’s diversified global presence, combined with its strong financial performance and upside potential, makes it a solid choice for investors seeking both income and growth in the gold sector.
