If you love volatility, you likely own stakes in some hedges.
Because we all know that the bulls can’t win every day.
These hedges can be bonds, cash, puts or Precious Metals.
And the latter is what we’re going to dig into today.
Precious metals are enjoying glittering performances in 2019.
Even the investors’ favorite, Gold, has gained nearly 17%!
That puts it ahead of the Dow Jones Industrial Average and right in line with the performance of the S&P 500.
Now, during the difficult six-year bear market in precious metals, gold really wasn’t worth talking about.
Everyone wanted to know when gold was going to get its shine back. Unfortunately for gold bugs, it largely remained range-bound after tumbling to near decade lows in December 2015.
But today’s a different story.
Gold loves uncertainty. And right now, we’ve got plenty of it.
Trade wars, tariffs, a weakening U.S. dollar, global economic malaise and increased volatility have brought gold from the wings back to center stage.
The safe haven is once again churning out gains.
Though, as is often the case, mining stocks typically outpace the underlying commodity’s move higher.
So while the price of gold is up roughly 17%, the VanEck Vectors Gold Miners ETF (NYSE: GDX) is up 28.6%. That performance is leaving the broader markets – and gold – in its wake.
With that in mind, I looked at the largest gold miners in the world based on the millions of ounces they produced in 2018…
Way out in front is the newly minted behemoth, Newmont Goldcorp (NYSE: NEM).
To kick off 2019, Newmont Mining snatched up Goldcorp for $10 billion.
So it’s going to get even bigger. But that’s that not all…
First, Barrick Gold Corp. (NYSE: GOLD) purchased Randgold Resources in September 2018 for $18.3 billion. Barrick was formerly the largest gold miner in the world. And it apparently wanted to regain that crown.
Barrick launched a hostile takeover of Newmont earlier this year. That eventually crumbled. But since then, Barrick and Newmont announced a joint venture in Nevada.
So apparently there are no hard feelings.
Next on the list we have the other member of the “Big Three,” AngloGold Ashanti (NYSE: AU). The South African company has 17 gold operations in nine countries.
The copper (and gold) king Freeport-McMoRan (NYSE: FCX) also rounds out the household names. Many investors forget that Freeport is a considerable gold producer.
But here’s the thing, just because a company is the largest doesn’t mean its shares are the fastest moving…
Remember, I said that the VanEck Gold Miners Etf had gained 28.6% in 2019.
Shares of Newmont are slightly underperforming that benchmark, up 25%.
But we see that Barrick has gained 47%, and Kinross Gold (NYSE: KGC) and Newcrest Mining (OTC: NCMGY) are both up more than 65%.
Leaving those in the dust are AngloGold and Gold Fields (NYSE: GFI), up more than 130% apiece.
Only Freeport has really struggled. Copper gets to shoulder all the blame for that.
So it’s a good year to be in gold.
Prices have slipped below $1,500 per ounce recently. But from what I’m hearing from my contacts in the industry, no one thinks gold prices are going to collapse. They see gold moving to $2,500.
Of course, that won’t be overnight.
But the planets appear to be aligned for precious metals to shine even brighter.
Good investing,
Matthew
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