Top Gold Stocks of April 2019
In times of market turmoil, investors regularly turn to gold as a safe haven asset. However, they can also make a type of indirect investment in gold by buying shares of mining and related companies which focus on gold production. Depending upon their business models and structures, these companies may not be as directly influenced by the price of gold as a direct investment in the precious metal itself. On the other hand, these companies often also have exposure to many other markets, diluting their connection to the price of gold further. Some of the top gold mining operations include companies like Barrick Gold (ABX) and Newmont Mining Corp. (NEM).
On February 25, 2019, Newmont Mining (NEM) announced a plan to merge with Barrick Gold. If approved, it would create the largest company with Tier One gold assets in the world.
As gold prices have been relatively stagnant, gold companies are seeking mergers and other strategic moves to control market share.
After reaching a low point in August of 2018, gold rallied off and on throughout the final four months of the year. Although it wasn’t able to end the year with overall gains for 2018, gold nonetheless bounced back in the final weeks before 2019. This may have been in part thanks to the devastating losses surrounding the broader market, as investors looked to escape highly volatile stocks in favor of something they hoped to be more stable. On the other hand, many gold mining companies saw relatively significant gains over the course of the month of December. Barrick Gold and Randgold Resources, two of the largest mining operations in the world, finalized a planned merger to create a new behemoth in the gold mining industry. Rumors of Fed rate hikes also helped to propel these stocks upward, even as many other industries were in decline.
In considering the top gold stocks, we’ve drawn from among the largest gold mining and related companies in the world. Each of these companies has a market cap of more than $4 billion, and many are significantly larger than that. The list here is presented in order of monthly performance based on the opening stock price, as of December 3, 2018, and closing price as of December 31, 2018. We’ll compare a company’s performance against the average performance of 7.76% of the S&P Commodity Producers Gold Index for the same time period.
AngloGold Ashanti (AU)
Market Cap: $5.51 billion
52-week Performance: 47.51%
The third-largest gold mining company in the world in terms of production, AngloGold Ashanti is a South African company with operations in nearly a dozen countries. In 2004, the company as it currently stands was formed when AngloGold Limited and Ashanti Goldfields Company Limited merged. In 2017, the company produced about 3.8 million ounces of gold.
Heading into the final few months of 2018, AngloGold Ashanti touted impressive figures. The company’s all-in sustaining costs (AISC) improved 14% year-over-year for Q3 2018, with full-year production figures estimated to be at the top end of guidance. Further, AngloGold Ashanti strengthened its position relative to other companies in its industry by continuing to stand out for its safety practices.
AU stock has plateaued somewhat during the month of January, but it could be poised for bigger gains following the release of overall 2018 figures in mid-February.
Kirkland Lake Gold Ltd. (KL)
Market Cap: $6.85 billion
52-week Performance: 100.62%
Kirkland Lake Gold focuses on gold production from mines in Australia and Canada. The company, headquartered in Ontario, set as a target production level for 2018 670,000 ounces of gold. The company’s stated goals include delivering low-cost production, continuing to advance its exploration and development pipelines, and supplementing its resource reserve base so as to make possible future growth.
In early January, Kirkland Lake Gold announced that it had surpassed its production goals for 2018, producing nearly 724,000 ounces of gold across the year. Production in Q4 was close to 231,000 ounces, exceeding the previous top-producing quarter by 28%. The company is continuing its exploration process at its Fosterville mine and success in that area could fuel continued growth into the future.