With economic uncertainties likely persisting into 2024, gold remains in favor as a haven investment hedge against market volatility. As the precious metal continues exhibiting strength, gold mining stocks providing leveraged exposure look primed for gains. This guide explores the top gold stocks analysts expect to outperform next year.
Gold’s Safe Haven Status Endures into 2024
Gold has served as universally recognized store of value for centuries, appreciated for preserving wealth through periods of war, uncertainty, and currency debasement cycles. 2023 saw the yellow metal’s price break out to an all-time high above $2,085/oz in early March as spiking inflation and Russia’s invasion of Ukraine roiled markets.
While Federal Reserve rate hikes eventually strengthened the dollar and pushed gold back down around $1,600 by November, bullion found its footing above $1,750 before powering up beyond the key $1,800 resistance level in late December.
As the new year dawns, the investment premise for maintaining exposure to gold remains on solid ground looking out into 2024.
Key Gold Market Drivers Aligning
With many market analysts predicting a reasonably high likelihood of recession arriving sometime next year to combat lingering inflation, gold should retain its magnetism as a flight-to-safety destination for capital preservation-minded investors.
Adding expectations that easing inflation data may encourage the Fed towards moderating interest rates as 2023 progresses, real rates could fall back into negative territory. This typically sparks rotation into non-yielding gold as an alternative to eroding cash savings losing purchasing power.
Geopolitical tensions around the world also show no signs of abating anytime soon. Russia’s aggression in Ukraine likely continues hampering vital food and energy flows from the Eastern European breadbasket region. Concurrent friction between the U.S. and China over Taiwan’s sovereignty and North Korean nuclear proliferation dangers keep boiling in Asia.
The Middle East likewise remains a perpetual hotbed breeding instability flare-ups. Any or all of these factors could ignite safe haven demand pulling investors towards gold’s timeless role defending capital throughout history’s darkest periods.
Bullion buying by central banks looking to diversify foreign reserves away from depreciating dollars also seems poised to continue accelerating into 2024 based on survey data compiled by the World Gold Council. Almost 25% of reserve managers globally namechecked the yellow metal as the favored target for asset allocation flows in the year ahead.
With all signals appearing supportive to gold’s underlying bid underneath the market heading into next year, related gold mining stocks often outperform the metal itself by capturing operational upside leverage as rising prices expand profit margins.
Top Gold Stocks Analysts Expect to Outperform
The highest potential return gold stocks recommended by Wall Street analysts heading into 2024 include both senior and junior miners alongside specialty royalty/streaming companies with outsized exposure to sector growth drivers.
Utilizing TipRanks’ powerful Comparison Tool, we’ve filtered down to a shortlist of noteworthy names savvy investors should evaluate adding exposure towards in gold portfolios.
Senior Gold Miners
Barrick Gold Corp (NYSE: GOLD)
The world’s second largest gold miner in terms of output, Barrick maintains a rock-solid balance sheet funding an unrivaled pipeline of organic growth projects focused mainly across the Americas. The Canadian major also co-owns the gigantic copper asset Lumwana in Zambia, providing additional revenue streams from base metal exposure.
Barrick has sold forward around 20% of expected gold production over the next five years at an average locked-in price above $1,800 per ounce. This unique strategy demonstrates management confidence that bullion’s secular uptrend likely continues running towards new highs through mid-decade.
Newmont Corporation (NYSE: NEM)
Claiming the gold mining industry’s top spot by market capitalization and production volumes, this Colorado-based veteran mining firm reliably generates strong cash flows funding an industry-leading dividend. Newmont’s global portfolio encompasses favorable mining jurisdictions primarily across North and South America, Africa and Australia.
The company continues driving future output growth through capital investments in existing infrastructure and vast land packages surrounding current mines. Analysts see Newmont’s stability and low-cost structure keeping its shares buoyant amid sector tailwinds.
Intermediate Gold Producers
Kinross Gold Corp (NYSE: KGC)
Spread across a healthy blend of operating mines and promising development assets in the U.S., Brazil, Chile, Ghana and Russia, Kinross offers investors relatively low-risk precious metals exposure through a well-managed mid-tier miner. The company enjoys robust free cash flow generation largely directed towards shareholder returns through buybacks and its quarterly dividend.
The stock trades at bargain multiples relative to peers with analysts eyeing upside ahead as strong executive stewardship guides Kinross through upcoming higher production years.
Junior Gold Developers
Osisko Gold Royalties (NYSE: OR)
This unique company consolidates royalties and streaming agreements across dozens of North American gold development projects at various stages. Instead of traditional mining, Osisko deploys upfront capital entitled to receive fixed percentages of future mine production, avoiding operating cost and execution risk.
Backing some of the gold sector’s highest quality growth assets, analysts see Osisko’s royalty interests appreciating substantially as contract counterparties advance construction over coming years. Juniors Victoria Gold and O3 Mining represent just two names across Osiko’s royalty portfolio with big potential.
Additional Gold Stocks Appearing Undervalued
Analyzing gold equities based purely on projected returns fails capturing names where current valuations may underestimate existing strengths. By comparing enterprise value-to-EBITDA (EV/EBITDA) ratios indicating relative cheapness, three more miners stand out.
AngloGold Ashanti (NYSE: AU) shows capable stewardship transforming this South African major’s legacy production base towards a rebalanced Americas/Australasia footprint targeting lower risk jurisdictions. Trailing competitors at 5x EV/EBITDA, cost discipline and conservative guidance could let AU stock re-rate higher mitigating country risks.
Yamana Gold (NYSE: AUY) boasts recent property acquisitions cementing intermediate producer status forecast above 1 million gold-equivalent ounces for 2024-2026. Despite trailing only Kinross and Barrick on EV/EBITDA metrics, AUY shares haven’t enjoyed the same re-rating benefiting peers during recent years supporting this Canadian miner’s comeback potential.
Gold Fields Ltd (NYSE: GFI) must demonstrate successful integration of its game-changing $6.7 billion buyout for Canada’s Yamana mines finalized last year. But GFI stock arguably fails reflecting fully realized synergies from this transformative deal marking Gold Fields’ much improved growth track. Once realizing full run rate potential from this deal spanning the Americas, GFI could warrant compelling turnaround consideration.
Best Gold ETF: SPDR Gold Shares (NYSEARCA: GLD)
For investors preferring direct liquid exposure to physical gold prices alone without company-specific risks, exchange-traded funds (ETFs) hold advantages. As the world’s largest gold-backed ETF with $56 billion in assets under custody, the SPDR Gold Trust (aka GLD) stores bullion across secure vaults to eliminate counterparty risks.
GLD shares can be conveniently traded through brokerages at spot valuations closely tracking prevailing gold prices. This makes the fund an ideal instrument replicating gold’s upside while eliminating hassles and expenses associated with directly owning coins or bars outside specialist facilities. Over 17 years since launching, GLD has reliably served its core objective moving tick-for-tick aligned to gold.
Constructing an Optimal Gold Portfolio
Prudent precious metals investors avoid concentrating excess exposure on any single company, preferring to distribute capital across a judiciously chosen mix of miners balanced by risk category.
- 50-70% allocated to senior/intermediate producers providing stable cash flows funding dividends plus visibility into reserves ensuring longer-dated production. Focus highest weights towards lowest cost majors with operations in favorable jurisdictions and balance sheet strength mitigating risks.
- 15-30% allocated towards junior developers with promising assets exhibiting potential dramatically expanding gold resources through ongoing exploration and project optimization work. Emphasize those holding already economically robust deposits in constructible settings.
- 10-20% directed to physical gold ETFs like GLD supplying foundational direct spot price exposure and acting as portfolio ballast. Allows benefiting from occasional discrepancies between mining equity valuations and underlying metal values.
- 0-5% optional allocation to tactical mining trade ideas rounding out exposure by betting on turnaround stories or M&A speculation targets expected to outperform peers under specialized circumstances for short periods.
Sample 2024 Model Gold Portfolio
|Osisko Gold Royalties
|Royalty / Streaming
|SPDR Gold Shares (GLD)
|Anglogold Ashanti (Speculative Turnaround)
Balancing majors, mid-tiers, royalty vehicles and physical gold ETFs can allow benefiting from multiple segments all leveraged to bullion’s upside.
Strategies for Profiting off Rising Gold Stocks
Consider utilizing selected approaches tactical traders employ capitalizing on bullish gold equities momentum once the next leg higher takes hold.
Trend Following – Identify the strongest technically behaving gold mining stocks in emerging uptrends showing positive relative strength outpacing peers.
Breakout Trading – Buy gold stocks crossing above resistance levels or consolidating under key moving averages before powering higher.
Swing Trading – Ride the rises of intermediate bull runs then take profits anticipating routine pullbacks.
Momentum Burst Option Play – Target shorter-term call option contracts on miners exhibiting surging short-term momentum squeezing bears.
Value Rotations – Shift towards gold equities appearing relatively undervalued based on financial metric comparisons against industry competitors.
Event-Driven – Attempt early positioning in consolidation patterns ahead of major project development milestones like construction decisions and mine expansions.
Pre-Earnings Run-Up – Buy ahead of quarterly results where metrics like AISC, cash costs, throughput, reserves, and production beat expectations.
Expert Gold Stock Investing Tips
Apply these best practices when buying gold mining stocks:
- Maintain a long-term perspective on position holds
- Use volatility including sharp overnight declines to accumulate at better cost basis
- Reinvest dividends from low-debt cash flow generators compounding income streams
- Avoid excess allocation single speculative exploration plays due to extreme risk
- Scrutinize balance sheets and cash levels mitigating potential dilution risks
- Review quarterly operating metrics like AISC, grade, tonnage relative to guidance
- Monitor insider buying reported on regulatory filings indicating management confidence
With monetary turbulence signaling recession risks heading into 2024, gold exposure seems destined for renewed interest amid market uncertainties lying ahead. While nominally range-bound lately, gold and leveraged miner stock breakouts look overdue when macro viability of bloated stock valuations gets tested.
Among senior mining giants, Barrick Gold stands atop class relative valuation comparisons with aggressive forward sales crystallizing profits if bullion revisits all-time highs. Mid-tier stalwart Kinross Gold offers relatively low-risk precious metals exposure through a well-managed producer which could eventually lure a major seeking production scale.
Further up the risk curve but where huge discoveries drive epic shareholder value explosions, Osisko Gold Royalties holds royalty interests appreciating substantially as contracted counterparties advance mine builds de-risking assets into eventual cash flowing gems.
Finally, direct price tracking instruments like SPDR’s GLD ETF supplies foundational portfolio exposure allowing capitalizing on gold upswings without introducing individual company uncertainties into holdings mix.
Layering together some combination of majors, mid-tiers, royalty vehicles and physical gold ensures smooth participation across bullion’s many upside catalysts aligning on horizon headed into New Year.
FAQs on Investing in Gold Stocks
How much upside do analysts forecast for gold stocks?
Based on average price targets, analysts expect around 30% upside over the next year from leading gold mining stocks like Barrick Gold (GOLD), Osisko Gold (OR) and Agnico Eagle Mines (AEM) as bullion prices likely challenge new highs.
What are the best gold stocks under $10?
Some of the best junior gold miners trading below $10 per share exhibiting sizable discovery upside potential include excellent buy-rated names like Vox Royalty (VOXR), Prime Mining (PRYM), Aris Gold (ALLXF), Calibre Mining (CXBMF) and Revival Gold (RVLGF).
Should I buy the GDX or GDXJ gold mining ETFs instead of stocks?
The GDX and GDXJ gold miner ETFs from VanEck provide diversified passive exposure to senior and junior gold stocks respectively. However, concentrated risks can arise around single name weightings above 10-15% in cap-weighted indexes. Savvy active selection of individual miners allows concentrating into top picks mitigating flaws underlying indexed approaches.
Are gold royalties and streaming companies less risky than miners?
Royalties and streaming companies like Wheaton Precious Metals (WPM), Franco-Nevada (FNV) and Royal Gold (RGLD) carry advantages having mitigated exposure to mining execution risks and costs inflation while still benefiting from reserves/resource expansion at contracted project interests. This makes the royalty/streaming subsector relatively attractive on a risk-adjusted basis.
What percentage of a portfolio should one allocate to gold miners?
Mainstream financial advisors suggest keeping a 5-20% strategic allocation towards gold mining equities and/or physical bullion ETFs in a diversified portfolio. This balances gold’s portfolio volatility reduction attributes while limiting excessive concentration into an asset category that tends to underperform during economic expansions favoring stocks and bonds.
In another related article, 2024 Gold ETF Investing Guide for Beginners