5 gold stocks and ETFs to watch
Trading or investing in gold stocks or gold ETFs can be a great way to gain exposure to the gold market. That’s why we've created a list the most popular gold stocks and ETFs to watch.
What’s the outlook for gold markets and gold stocks?
In 2020, the gold market was one of the few sectors that was able to weather the storm of the Covid-19 pandemic. In fact, the price of the precious metal increased by over 20% from January 2020 to January 2021 as investors turned to it as a store of wealth during the uncertain market conditions caused by the pandemic.
This is because gold is typically seen as a safe haven in times of financial crisis, so investors use it as a hedge against inflation. It’s worth noting that this relationship is not set in stone, especially as investors may turn to other asset classes as a safe haven – such as the US dollar, Japanese Yen and silver. So, if global markets crash, there is always the possibility that the gold market and gold stocks could fall as well.
Top 5 gold stocks to watch
- Barrick Gold Corp (GOLD) – $36.54 billion
- Agnico Eagle Mines (AEM) – $14.72 billion
- Eldorado Gold Corp (EGO) – $1.99 billion
- Sandstorm Gold Ltd (SSL) – $1.80 billion
- Jaguar Mining Inc (JAG) – $482.20 million
Barrick Gold Corp (ABX)
Barrick Gold Corp (ABX) is one of the largest companies in the gold mining industry – both in terms of its operating size and amount of gold produced. It’s also among the world’s largest publicly traded copper producers.
Barrick Gold Corp has operations across the globe, with mines in the US, Tanzania, Canada, Democratic Republic of Congo, Mali and Argentina – to name a few. Barrick Gold Corp is listed on the Toronto Stock Exchange under the ABX ticker, and the New York Stock Exchange (NYSE) under the GOLD ticker.
Agnico Eagle Mines (AEM)
Agnico Eagle Mines Ltd (US) is a Canadian gold mining company that’s been producing precious metals since 1957. It has mines around the world, including in Canada, Mexico and Finland – with exploration operations in these countries plus the US and Sweden.
Agnico Eagle Mines has a business model set around building a growing, high-quality, low risk and sustainable company. Agnico Eagle Mines is listed on the Toronto Stock Exchange and the NYSE under the AEM ticker.
Eldorado Gold Corp (EGO)
Eldorado Gold Corp (US) is a Canada-based gold mining company that’s been around since 1992. In total, the company has operations in six countries across three continents, and it boasts five producing mines.
These mines yielded 395,000 ounces of gold in 2019 – which are the latest figures that the company includes on its website. Eldorado Gold Corp is listed on the Toronto Stock Exchange under the ELD ticker, and the NYSE under the EGO ticker.
Sandstorm Gold Ltd
Sandstorm Gold Ltd is a metal royalties company – it owns the rights to buy gold and other metals from mining companies and development projects. The company has grown from having zero royalties in 2008, to over 200 in 2021.
It has projected cash flows of $140 million in 2025, up from projections of $87 million for 2021. Sandstorm Gold is listed on the Toronto Stock Exchange under the SSL ticker.
Jaguar Mining Inc
Jaguar Mining Inc is a Canada-listed gold production, development, and exploration company operating in the Iron Quadrangle – a greenstone belt located in Minas Gerais, Brazil. The company states on its website that this area of Brazil contains world-class multi-million ounce gold deposits.
Jaguar Mining wants to achieve recognition in the gold mining industry as having a focus on sustainable production. It’s listed on the OTC Markets under the JAGGF ticker.
Gold ETFs to watch
- GraniteShares Gold Trust ETF
- ETFS Physical Swiss Gold Shares ETF
- iShares Gold Trust
- SPDR Gold Shares
- Sprott Gold Miners ETF
- VanEck Vectors Gold Miners ETF
- iShares MSCI Global Gold Miners ETF
An alternative way to gain exposure to gold stocks is to trade or invest in gold exchange traded funds (ETFs). There are a variety of options to look at when you’re deciding on the best gold ETF for you, as different funds will have different functions, costs and offerings.
There are some funds that buy and hold gold bullion. For example, GraniteShares Gold Trust ETF is designed to track the performance of the price of gold, and its holdings of gold bullion are in secure vaults in London.
Trading GraniteShares Gold Trust can be a great way to get exposure to bullion without trading the precious metal itself, but it is extremely sensitive to the price of gold. Similar gold-based ETFs include ETFS Physical Swiss Gold Shares ETF, iShares Gold Trust and SPDR Gold Shares.
You could also look at equity-based ETFs that track companies involved in the mining and production of gold. For example, the Sprott Gold Miners ETF consists of a basket of over 25 gold and silver mining stocks that trade on US exchanges. Similar equity-based gold ETFs include VanEck Vectors Gold Miners ETF and iShares MSCI Global Gold Miners ETF.
Are gold stocks a good investment?
Broadly speaking, gold stocks come with the same risks as other stocks. If you’re looking for growth potential, then there are some great opportunities in the market. But as with any industry, there is also the potential for low revenues and disruptions to the supply chain, which can affect share prices.
Despite this, a lot of people view gold stocks as a great alternative to investing in the precious metal itself. The share prices of gold mining and production companies don’t necessarily respond as quickly to changes to the value of gold, which means they can be a good way to hedge exposure to gold prices. There are even those who believe that gold stocks have the potential to outperform gold itself.
Instead of investing, you could trade gold stocks. You’d be speculating on the underlying price of the company’s shares, without taking ownership of the stocks themselves.
When you trade with derivatives such as CFDs, you can go long and short – which means you can take a position on prices rising or falling. Especially given the volatile nature of the gold market, being able to go short provides a range of opportunities for traders.
How to start trading gold stocks and ETFs
- Invest in gold stocks or ETFs by opening a share trading account
- Start trading CFDs on the price of gold stocks and ETFs by opening a live account
- Build your confidence in a risk-free environment by opening a demo account
If you don’t feel ready to start trading just yet, you can continue to learn more with IG Academy’s range of online courses.
1, 2 Correct at the time of writing, 6 July 2021.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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