Equities from Gold Miners

Stocks from Gold Mining Companies are another possibility to profit from a rising gold price. These Companies explore and dig gold and sell the metal with a profit on the market. These earnings are paid out to investors via a dividend. So it is possible to earn money with gold stocks even if the gold price is going sideways. But Gold Stocks go particularly well, if the gold price is rising.

Another advantage is, that gold stocks are no gold and can therefore not be banned and controlled by the state (as long as the gold-mine is not nationalized by the producing country.

 

But it's not so easy to find the right Gold Stock. Investors often get tricked by high performance promises from "gurus" and newsletters. But those penny-stocks are high risk, as they often have no gold-mine in place but just a lot of costs to explore a hidden treasure. Think about: Why would a guru give YOU an excellent investment advice other than just driving a stock's price higher he owns and wants to sell to you?

Therefore it's recommended to invest into the larger producers who have several mines in place. The biggest gold stocks are: Barrick Gold, Goldcorp, Newmont Mining, Newcrest Mining, Anglogold Ashanti, Kinross Gold, Goldfields, Yamana Gold, Eldorado Gold and Rangold Resources. There are also investment funds and ETFs on the market who invest in all of these gold stocks.

 

Pros:

  • Gold Stocks offer a (Hyper) Inflation-Protection
  • Gold Stocks are not physical gold and can therefore offer a protection against a gold ban
  • dividend income
  • market gains from new gold explorations
  • a Gold-Stock-Fund offers diversification in different stocks

Cons:

  • Company Risk
  • political risks (war, export ban, nationalization & dispossession)
  • rising production costs (energy, wages)
  • declining output capacity
  • no 1:1 participation on the gold price
  • higher costs for holding equities and funds compared to physical gold

Gold Price History 5 years