Top Dividend Paying Gold Mining Stocks

by Fred Fuld III

4 minute read time

Gold has long been prized for its value and versatility, serving both as a store of wealth and a key material in various industries. As a precious metal, gold has traditionally been used to hedge against inflation, providing stability to investors during times of economic uncertainty. Its intrinsic value, resistant to the erosive effects of inflation, makes gold a safe haven when currencies fluctuate or geopolitical risks rise. Beyond its monetary significance, gold has numerous applications, ranging from jewelry and electronics to medicine and aerospace. This enduring demand across sectors ensures that gold remains a valuable asset, even as economies shift.

For investors seeking income as well as exposure to the gold market, dividend-paying gold mining stocks offer a unique opportunity. While gold itself does not generate cash flow, companies that mine gold can distribute profits to shareholders in the form of dividends. Below, we highlight three top gold mining stocks known for their dividend payouts: B2Gold (BTG), Centerra Gold (CGAU), and Gold Fields (GFI). These companies not only benefit from rising gold prices but also reward shareholders with consistent income.

B2Gold (BTG): A Low-Cost Producer with Strong Dividends

B2Gold, based in Canada, is one of the world’s low-cost senior gold producers, with operations in Mali, the Philippines, and Namibia. Known for its disciplined approach to mining, B2Gold has maintained a strong balance sheet and low debt, allowing it to reward shareholders with steady dividends. The company has a market capitalization of approximately $4.1 billion, reflecting its significant presence in the gold mining industry. With a forward price-to-earnings (P/E) ratio of 7.7, B2Gold offers attractive value, especially for investors looking for exposure to the gold market at a reasonable valuation.

What sets B2Gold apart is its commitment to returning capital to shareholders through its dividend program. Currently, the stock has a dividend yield of around 4.8%, making it one of the more attractive income plays in the sector. Despite fluctuations in gold prices, B2Gold’s efficient operations and strong cash flows enable it to sustain its dividend while continuing to invest in growth. For income-focused investors seeking stability, B2Gold is a compelling choice.

Centerra Gold (CGAU): A Diversified Gold and Copper Producer

Centerra Gold is a Canadian-based gold mining and exploration company with operations and projects in North America, Turkey, and Mongolia. Centerra distinguishes itself through its diversified production profile, which includes significant exposure to copper in addition to gold. This diversification provides Centerra with some insulation from the volatility of gold prices, making it a well-rounded investment in the resource sector. The company has a market cap of about $1.5 billion and a forward P/E ratio of 10.3, indicating that the stock is relatively inexpensive compared to its earnings.

Centerra Gold offers a dividend yield of approximately 2.9%, providing investors with a reliable income stream. The company’s ability to generate cash flow from both gold and copper production helps support its dividend payments, even in challenging market conditions. While Centerra has faced operational challenges in the past, particularly at its Kyrgyz Republic operations, it has worked to diversify its asset base and reduce geopolitical risk. For investors seeking a blend of gold exposure with a diversified resource portfolio, Centerra Gold presents an intriguing opportunity.

Gold Fields (GFI): A Global Player with Robust Dividends

Gold Fields, headquartered in South Africa, is one of the largest gold mining companies in the world, with operations spanning South Africa, Ghana, Australia, and South America. The company has built a reputation for its focus on sustainability and operational efficiency, ensuring long-term value creation for its shareholders. With a market capitalization of approximately $13.9 billion, Gold Fields is a major player in the gold mining industry. The stock has a trailing P/E ratio of 22 and a forward P/E ratio of 8.6.

Gold Fields stands out for its commitment to paying dividends, offering a dividend yield of around 2.5%. The company has a history of adjusting its dividend payments to reflect profitability, which allows it to maintain a healthy balance sheet while still rewarding shareholders. As a global producer, Gold Fields benefits from diverse geographical exposure, reducing the risks associated with operations in any single region. For investors looking for a large, stable gold mining company with a solid dividend, Gold Fields is a strong contender.

Conclusion

As gold continues to serve as a hedge against inflation and economic instability, gold mining companies offer a unique way for investors to benefit from rising gold prices while also earning income through dividends. B2Gold, Centerra Gold, and Gold Fields represent three top dividend-paying gold miners, each with its unique strengths. B2Gold provides low-cost production and a high yield, Centerra offers diversification through copper, and Gold Fields delivers global exposure and robust dividends. For investors seeking both growth potential and income, these gold mining stocks are worth serious consideration.

Disclosure: Author didn’t own any of the above at the time the article was written.

A Stock That Will Pay You in Real Physical Gold

by Fred Fuld III

4 minute read time

VanEck, a well-known investment management firm, was founded in 1955 by John C. van Eck in New York City. From its inception, the firm focused on offering innovative investment strategies that centered around international markets and commodities, which were not commonly available to U.S. investors at the time. One of the firm’s early milestones came in 1968 when VanEck launched the first international mutual fund in the United States, known as the VanEck International Investors Gold Fund (INIVX). This fund provided exposure to gold-mining companies, anticipating the growing demand for gold investments as a hedge against inflation and economic uncertainty.

In the following decades, VanEck continued to expand and innovate. In 1985, the firm introduced one of the first emerging markets funds in the U.S., recognizing the growth potential in developing economies. This move further established VanEck’s reputation as a pioneer in offering investment opportunities in less conventional markets. By 1994, the firm had also expanded its offerings to include fixed income with the launch of its first bond mutual fund, broadening its appeal to a wider range of investors.

A significant milestone in VanEck’s history occurred in 2006 when the firm entered the rapidly growing ETF market with the launch of the Market Vectors ETF Trust. These ETFs quickly became some of the most popular in the industry, particularly for their targeted exposure to specific sectors, commodities, and emerging markets. VanEck’s ETFs were recognized for providing investors with access to niche markets that were otherwise difficult to reach, solidifying the firm’s leadership in the ETF space.

By 2011, the Market Vectors Gold Miners ETF (GDX) had become one of the most traded ETFs globally, underscoring VanEck’s expertise and influence in sector-focused ETFs. In 2016, VanEck rebranded its Market Vectors ETFs under the VanEck name, reflecting the firm’s strong identity and reputation in the investment industry.

In recent years, VanEck has been at the forefront of the cryptocurrency and digital assets space, launching cryptocurrency-focused ETFs and mutual funds. The firm has also been active in advocating for the approval of the first Bitcoin ETF in the U.S., although this endeavor has faced regulatory challenges.

Today, VanEck is recognized as a leading global investment management firm, offering a diverse range of investment products, including mutual funds, ETFs, and institutional accounts. The firm remains privately owned, with Jan van Eck, the son of the founder, serving as the current CEO. VanEck’s commitment to innovation and its global reach, with offices in the U.S., Europe, Asia, and Australia, continue to make it a significant player in the investment industry, particularly in areas like commodities, emerging markets, natural resources, gold, and alternative investment strategies.

VanEck has a unique ETF, the VanEck Merk Gold Trust (OUNZ), which allows you to exchange your shares for physical gold.

The stock, founded on May 16 of 2014, is up 18.81% year-to-date and has total net assets of $1.04 billion. The expense ratio is 0.25%. It even has options traded on it.

The official description of the fund is “VanEck Merk^®Gold Trust seeks to provide investors with a convenient and cost-efficient way to buy and hold gold through an exchange traded product with the option to take physical delivery of gold.”

This gold trust has three major advantages:

Exchange for Bullion

The VanEck Merk Gold Trust holds its gold bullion in the form of allocated London Bars, offering a unique feature that allows investors to take physical delivery of the gold bullion in exchange for their shares.

Choice of Gold Coins or Bars

To facilitate this delivery, Merk has developed a proprietary process that converts London Bars into gold coins and bars in denominations that meet investors’ preferences.

Non-Taxable Event

Importantly, taking delivery of this gold is not considered a taxable event, as investors are simply taking possession of the gold they already own.

So for investors looking for a way of investing in gold, maybe not ready to take physical possession yet but may in the future, this may be an option worth looking at.

Disclosure: Author didn’t own any of the above at the time the article was written.

Golden Streams: Top Gold Royalty Stocks to Cash In on Precious Metal Gains

by Fred Fuld III

Gold and silver royalty and streaming companies offer a unique way to invest in precious metals. Unlike traditional mining companies, royalty companies provide upfront capital to miners in exchange for a percentage of the revenue or the metal produced from a mine. Streaming companies, on the other hand, provide financing to mining operations in exchange for the right to purchase a percentage of the mine’s production at a predetermined price. These business models allow royalty and streaming companies to benefit from rising metal prices without the operational risks associated with mining, such as production costs and environmental challenges.

The price of gold has been on an upward trend due to several factors, including economic uncertainty, inflation concerns, and geopolitical tensions. Gold is often seen as a safe-haven asset during times of crisis, and with central banks around the world adopting loose monetary policies, the appeal of gold and silver as a hedge against inflation has increased. Additionally, declining real interest rates have made non-yielding assets like gold more attractive to investors. As these factors persist, the price of gold may continue to rise, benefiting companies in the royalty and streaming sectors. In this article, we’ll explore five top gold and silver royalty and streaming stocks—Osisko Gold Royalties (OR), Wheaton Precious Metals (WPM), Royal Gold (RGLD), Franco-Nevada (FNV), and Sandstorm Gold (SAND). Each of these companies has a market capitalization exceeding $1 billion and offers a dividend yield above 1%.

Osisko Gold Royalties (OR)

Osisko Gold Royalties, headquartered in Montreal, Canada, is a leading royalty company focused on precious metals. The company’s flagship asset is its 5% net smelter return royalty on the Canadian Malartic mine, one of the largest gold mines in Canada. Osisko has a diversified portfolio of over 160 royalties and streams, providing it with exposure to a wide range of precious metal projects across North and South America. The company’s strategic focus on low-cost, long-life assets has positioned it well to benefit from rising gold prices.

The stock, which has a low amount of long term debt, trades at 30 times forward earnings. With a market capitalization of over $2 billion and a dividend yield of approximately 1.5%, Osisko Gold Royalties is an attractive option for investors seeking exposure to the gold market.

Wheaton Precious Metals (WPM)

Wheaton Precious Metals, based in Vancouver, Canada, is one of the largest precious metals streaming companies in the world. The company has a diversified portfolio of streams on gold, silver, and palladium mines located in the Americas and Europe. Wheaton’s business model allows it to acquire metals at a fixed cost, providing significant upside potential in a rising price environment. The company’s high-quality assets and strong financial position have made it a leader in the streaming industry.

The company is debt free, has a price to earnings ratio of 46, and a forward P/E of 35. A market capitalization of over $20 billion and a dividend yield of around 1.2%, Wheaton Precious Metals offers a compelling investment opportunity for those looking to benefit from higher precious metal prices.

Royal Gold (RGLD)

Royal Gold, headquartered in Denver, Colorado, is a premier gold royalty and streaming company with a portfolio of over 180 properties across the globe. The company’s portfolio includes some of the most prolific gold mines in the world, including the Mount Milligan mine in Canada and the Peñasquito mine in Mexico. Royal Gold’s focus on high-quality, low-cost assets has allowed it to generate strong cash flows and consistently pay dividends to shareholders.

This company, with no long term debt, has a price to earnings ratio of 36, and a forward P/E of 22. The company’s market capitalization exceeds $8 billion, and it offers a dividend yield of approximately 1.2%. Royal Gold’s diversified portfolio and solid financials make it a top pick in the royalty and streaming space.

Franco-Nevada (FNV)

Franco-Nevada, based in Toronto, Canada, is the largest gold-focused royalty and streaming company in the world. The company has a diverse portfolio of over 400 assets, including gold, silver, and other precious metals, as well as oil and gas interests. Franco-Nevada’s business model is centered around low-risk, high-margin investments that provide long-term cash flow stability. The company’s strong balance sheet and disciplined approach to capital allocation have made it a favorite among investors.

The company is debt free and has a forward P/E of 31. With a market capitalization of over $30 billion and a dividend yield of about 1%, Franco-Nevada is a cornerstone investment for those seeking exposure to gold and silver.

Sandstorm Gold (SAND)

Sandstorm Gold, headquartered in Vancouver, Canada, is a growing gold streaming and royalty company with a portfolio of over 200 assets across the globe. The company has focused on acquiring streams and royalties on early-stage projects with significant exploration potential, providing it with exposure to future growth. Sandstorm’s management team has a strong track record of identifying and investing in high-quality assets, positioning the company for long-term success.

The stock’s trailing P/E is fairly high at 54, but the forward P/E is 34. Sporting a market capitalization of over $1 billion and a dividend yield of approximately 1%, Sandstorm Gold is an emerging player in the royalty and streaming sector.

Summary

As a group, these top gold and silver royalty and streaming stocks—Osisko Gold Royalties, Wheaton Precious Metals, Royal Gold, Franco-Nevada, and Sandstorm Gold—offer investors a unique and low-risk way to gain exposure to the rising prices of precious metals.

With market capitalizations exceeding $1 billion and dividend yields above 1%, these companies provide a combination of stability, income, and growth potential.

Their business models, which focus on acquiring royalties and streams from high-quality assets, position them well to benefit from ongoing economic uncertainty and the continued rise in gold prices. For investors looking to capitalize on the strength of the gold market, these stocks are worth serious consideration.

Disclosure: Author didn’t own any of the above at the time the article was written.

How to Invest in Gold, Silver, and Copper Bullion Without Buying Gold, Silver, and Copper Bullion

by Fred Fuld III

While gold, silver, and copper bullion can add diversification to your portfolio, there are some drawbacks to consider:

Storage Costs and Security: Physically holding these metals requires secure storage, which can be expensive,especially for larger quantities. Home insurance may not cover them, so you might need to rent a safe deposit box.There’s also the risk of theft if you store them yourself.
Liquidity: Selling physical bullion can be slower than selling stocks or ETFs. You may need to find a buyer willing to pay a fair price, especially for copper which has a smaller market.
Costs Associated with Buying and Selling: There are markups on buying bullion, and fees associated with selling it. These can eat into your profits, particularly for smaller investments.

For copper, there’s the added challenge of:

Bulkiness: Copper is a dense metal. Storing large quantities can be impractical due to the weight and space required. Investing in smaller, more manageable amounts may not be very cost-effective.
Limited Market for Reselling: Not all bullion dealers buy copper, and those that do may not offer competitive prices.

So if an investor wants to avoid the risks and volatility of mining stocks, what’s an investor to do?

Fortunately, there are commission-free ways of investing in bullion, with lots of liquidity.

The way to accomplish this is by buying precious metal Exchange Traded Funds.

The most popular one is the SPDR Gold Shares (GLD), which actually owns gold bars. The fund has $62.8 billion in assets and an expense ratio of 0.40%. It is up 12.3% year-to-date.

If you are looking for silver, there is the iShares Silver Trust (SLV). The trust has a net asset value of $12.9 billion and sports an expense ratio of 0.50%. The year-to-date return is almost double what GLD provided, generating 24.1%.

As for copper, there is no ETF that owns copper bullion directly. That bullion would take up a huge amount of space. However, there is the United States Copper Index Fund (CPER), which has an objective of tracking the price of copper using copper futures.

CPER is a very low cap ETF at $229 million, and carries a relatively high expense ratio of 1.o4%. The year-to-date return is 15.5%.

Most stock brokerage firms don’t charge a commission to invest in ETFs, making the precious metals ETFs a cost effective way to trade or invest in bullion.

So now you have a few options of getting into bullion with having to buy bars or coins directly.

Disclosure: Author has a long position in GLD.

Exploring the Significance of Gold in History and the Economy

A couple weeks ago, we posted an article about silver as an investment. Now it’s time for gold.

Gold has captivated humanity for millennia, with its allure dating back to ancient civilizations. As shiny nuggets were first discovered, gold quickly became a symbol of wealth and power. The scarcity and distinctive properties of gold made it highly prized. This led to the adoption of gold as currency by various cultures across the globe. Gold played a crucial role in shaping economies and trade networks, facilitating commerce and influencing political dynamics.

The California Gold Rush of the mid-19th century marked a pivotal moment in gold’s history. The discovery of gold nuggets at Sutter’s Mill in 1848 sparked a large migration to the American West, drawing people from all walks of life in search of fortune. The influx of prospectors fueled rapid economic growth and transformed California into a growing economy.

Gold is often regarded as a hedge against inflation due to its historical track record of preserving wealth during times of economic uncertainty. When inflation rises, the purchasing power of fiat currencies decreases. This leads investors to seek assets that can retain their value. Gold has demonstrated its ability to act as a store of value over centuries, making it a popular choice for investors looking to protect their wealth from the devastating effects of inflation.

During periods of high inflation, the price of gold tends to increase as investors flock to it as a safe haven asset. Gold’s scarcity and tangible nature contribute to its appeal as a hedge against inflation. Unlike fiat currencies, which can be subject to manipulation by central banks. The gold supply is limited, providing a natural defense against currency devaluation. Additionally, gold has inherent value and is not reliant on the performance of financial markets, making it a reliable hedge during times of economic turbulence.

Gold’s status as a globally recognized currency adds to its appeal as an inflation hedge. This universal acceptance of gold allows its liquidity as a hedge against inflation in various economic environments. Central banks and institutional investors often allocate a portion of their portfolios to gold to mitigate the effects of inflation and safeguard their wealth over the long term.

Some of the major U.S. gold mining companies are:

Company	Company Symbol	Price to Book	PEG	PE	Price to Sales	Forward PE	Yield
Coeur Mining Inc	CDE	1.7	NA	na	2.2	16.26	0
i-80 Gold Corp	IAUX	0.89	NA	NA	7.24	NA	0
Newmont Corp	NEM	1.55	0.79	NA	3.82	14.48	2.56%
Novagold Resources Inc.	NG	25.84	NA	NA	NA	NA	0.00%
Royal Gold, Inc.	RGLD	2.79	7.49	33.69	13.32	22.46	1.32%
SSR Mining Inc	SSRM	0.32	NA	NA	0.76	15.5	5.45%

Throughout history, gold has retained its status as a safe haven asset and a hedge against economic uncertainty. Its value surged during times of crisis, such as wars, financial crises, and geopolitical tensions. In the modern era, gold continues to play a crucial role in investment portfolios and central bank reserves, providing stability in volatile markets. Its timeless appeal as a store of value ensures that gold remains a cornerstone of global finance and culture.

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Disclosure: Author had no positions in any of the above at the time the article was written.

Fake Dirty Underwear: Why You Need to Buy Some

by Fred Fuld III

Recently, I posted an article about investing in silver and silver coins. But if you buy silver, or gold, coins, where do you hide them?

One popular location is a bank’s safe deposit box. But the disadvantages are that you can’t get access to the coins at all times, and if on the very rare occasion that the safe box is broken into, the bank isn’t responsible for the loss of contents.

So suppose you want to keep them at home. Unfortunately, burglars know all the common places.

These include your top dresser drawers, drawers in your nightstands, backs of closets, cookie jars, under your mattress, in the toilet tank, and other areas that are convenient for you but also the burglars.

Some sources suggest leaving the burglars a ‘tip’ which would be a small amount of cash that’s easy to find so that the burglars find it and leave without spending too much time in your house.

One source even recommends leaving a twenty dollar bill on a little table just inside your front door, because if the bad guys don’t find any money, they may retaliate by causing destruction in your house. This is especially true for teenage intruders.

Here is a suggestion. Get any old coins that you have in your house that aren’t worth much or even not worth anything above face vale, but just appear to be old. Put them in a container with a label on it that says ‘coin collection’ and keep it in your dresser. Keep your real coin collection in a much more secure location.

Let me tell you where you never should hide any items. Never, ever store valuables at the bottom of a wastebasket. The burglars may never look there, but it is almost certain that at some point, either you or a family member or a friend will accidentally throw out the valuables with the garbage. I personally had a close call with this type of hiding place.

So what does all this have to do with dirty underwear? There is a product that burglars wouldn’t even want to get close to, where you can hide cash, jewelry, or other valuables.

The product is called the Brief Safe Hidden Contents Travel Passport Wallet. A description of what it is in simple terms would be a pair of men’s underwear with a smear of coloring on it that looks like an accident took place in them. Inside is a stealth area where valuable items can be hidden.

This product is what is known as a diversion safe, also known as a camouflaged safe or secret stash container or hidden safe. It is a product to hide valuables in everyday household items.

If dirty underwear is a bit too gross, then there are plenty of other options. The ROLOWAY Hanger Diversion Safe is a way to hide valuables under an article of clothing hanging in your closet. A burglar might possibly check the pockets of all your coats and jackets that you have hanging up, but is he, or she, really going to take every article of clothing off all the hangers?

This product has one other advantage. According to the manufacturer, it is fireproof to 4200 degrees.

You might also consider a Dasani Bottled Water Diversion Safe or a Soup Can Diversion Safe.

There are plenty of items that you can hide in these safes. Here are just some examples:

keys
watches
medicine
cash
gold coins
silver coins
precious gems
diamonds
bullets
USB drives
necklaces
earrings
rings
small documents (e.g. Social Security card)
gold nuggets

Plan ahead. Keep your valuable safe.

Happy hiding!

This page contains Amazon Affiliate links.

Should You Shine On Silver? Examining the Benefits and Investment Options

Unveiling the Precious Metal’s Potential in Your Portfolio

Silver, the lustrous metal, has captivated investors for centuries. But beyond its beauty, silver offers a unique blend of potential benefits for your portfolio. Let’s explore why you might consider adding silver to your investment mix, and then delve into the various ways to hold this precious metal.

The Allure of Silver

Diversification: Silver’s price movements tend to have a low correlation to stocks and bonds. This means it can act as a hedge, potentially offsetting losses in other parts of your portfolio during economic downturns.
Inflation Hedge: Silver, like gold, has historically held its value well against inflation. As the cost of living rises, silver’s price may follow suit, protecting your purchasing power.
Industrial Demand: Silver’s industrial applications in solar panels, electronics, and medical devices create a constant demand stream, potentially influencing its price positively.
Potential for Growth: Silver’s supply is finite, while demand is expected to rise, particularly in developing economies. This imbalance could lead to price appreciation in the long run.
Affordable Entry Point: Compared to gold, silver offers a more accessible entry point for investors starting with precious metals.

Silver Investment Options: Weighing the Pros and Cons

PHYSICAL SILVER (Bullion & Coins):
- Pros: Tangible ownership, no counterparty risk, potential for collector’s value (for certain coins).
- Cons: Storage costs, insurance considerations, potential difficulty selling quickly.
SILVER MINING STOCKS:
- Pros: Potential for higher returns due to leverage on the silver price, diversification within the precious metals sector.
- Cons: Higher risk compared to physical silver, volatility associated with the company’s performance.
SILVER ETFs (Exchange Traded Funds):
- Pros: Low storage costs, fractional shares allow for easier investment amounts, high liquidity.
- Cons: You don’t own physical silver, expense ratios can eat into returns, counterparty risk associated with the ETF issuer.
  
  The most popular silver ETF is the iShares Silver Trust (SLV), which has an objective of tracking the price of silver.

A Word about Silver Coins and Authenticity

Be careful about buying silver coins, as there are many fakes being distributed. These are not just the coins with numismatic value but also the so-called junk silver coins and even the bullion coins (silver rounds).

Fortunately, there are several ways of checking whether a coin is genuine or not. One simple way is to use a phone app called CoinTester. It measures the sound of the ping when the coin is hit with an object, like a pencil.

First, you choose the type of coin. (Note: If you are checking a silver dollar, for Keyword, just type Dollar, not Silver Dollar.) You place the coin on your fingertip, tap Check on the app, then hit the coin a few times with something that won’t damage the coin (I use the wooden part of a pencil.) If is shows a 0 or 1 out of 3, it means the coin is a fake. If it shows a 2 or a 3 out of three, the coin is real.

Just remember that all tests for coins aren’t foolproof. The best approach is to buy from a very reputable coin dealer.

Many numismatic coins are slabbed. In numismatics (the study or collection of coins), “slabbed” refers to the process of encapsulating a coin in a hard plastic holder, often called a slab. These slabs are usually sealed and graded by a professional coin grading service. The purpose of slabbing coins is to protect them from damage and to provide an objective assessment of their condition and authenticity.

When a coin is slabbed, it is typically accompanied by a label indicating its grade, which is determined based on factors such as wear, luster, strike quality, and any imperfections. This grading process helps collectors and investors assess the value of the coin and provides assurance about its authenticity and condition.

Slabbed coins are often considered more desirable for collectors and investors because they come with a trusted third-party evaluation, reducing the risk of buying counterfeit or over-graded coins.

The Final Shine

Silver offers a compelling option for investors seeking diversification, inflation protection, and potential growth. Carefully consider your investment goals and risk tolerance when choosing between physical silver, mining stocks, or ETFs. Remember, a well-rounded portfolio is key, and silver can be a bright addition to the mix.

Statistics: Gold versus the Stock Market This Century

by Fred Fuld III

It may look like gold hasn’t been doing much of anything recently. Even for the last twelve months, gold has been relatively flat.

So what about long term. Can gold outperform the stock market over a long period of time?

Of course, it depends on the time frame, but let’s look at this century, beginning January 3, 2000 (the first business day of the year).

Based on that time frame, gold has far outperformed the various stock indices, including the S&P 500, the NASDAQ, and the Dow Jones Industrial Average.

As a matter of fact, gold has increased by 558% over that time, versus 329% for the S&P 500 as measured by the SPDR SPY ETF (SPY), which was only up 329%. This includes dividends for the SPY.

The statistics for the returns are below, which also include the Dow and the NASDAQ.

Gold versus Stocks This Century
Percentage increase in price from January 3, 2000 to the present

Dow Jones Industrial Average				190%
S&P 500 as measured by SPY				329%
NASDAQ as measured by QQQ				276%
Gold price per ounce				558%

* Adjusted for splits and dividend and/or capital gain distributions

Sources: Yahoo!Finance historical data, sdbullion.com

Is gold in your portfolio?

Top Inflation Hedge Gold Mining Stocks

by Fred Fuld III

It was just back in September when I wrote the article Top Gold Mining Stocks, almost six months to the day. In the article, I listed seven gold mining companies. The following shows the returns for those stocks.

Stock	Symbol	9/13/22	3/10/22	Gain/Loss
AngloGold Ashanti Limited	AU	15.5	25.73	66%
Caledonia Mining Corporation Plc	CMCL	12.36	13.49	9%
DRDGOLD Limited	DRD	9.15	10.14	11%
Gold Fields Limited	GFI	8.64	16.69	93%
Harmony Gold Mining Company	HMY	3.28	5.41	65%
Kinross Gold Corporation	KGC	5.75	5.66	-2%
Sibanye Stillwater Limited	SBSW	13.61	18.32	35%
AVERAGE				40%

As you can see, there was only one loser in the bunch, Kinross Gold (KGC) which was down 2%. However, all the others were up substantially. One, Gold Fields (GFT), almost doubled. The overall average return was 40%; not too shabby for a six month period.

Gold an Inflation Hedge & Recession Hedge?

Some studies have shown that gold may not track inflation during short time frames, but over long periods of time, gold has been considered an inflation hedge and a hedge against a downturn in the economy.

According to the U.S. Bureau of Labor Statistics, “gold prices can act as an indicator of the health of the economy. A rise in the price of gold may be a signal that the economy is struggling. As a result, in times of either a crisis or inflation, many investors turn to gold to protect their principal. By contrast, in times of economic stability, investors are more likely to turn to more speculative investments, such as stocks, bonds, and real estate. During these times, the price for gold often declines.”

(What is surprising about this statement is that stocks, bonds, and real estate are considered “speculative investments”. Does that make gold a “safe investment”?)

Top Gold Mining Stocks

So now that gold has started to move up, and recently broke the $2000 an ounce price barrier, what gold mining stocks have solid ratios now.

There are currently four gold mining companies that have trailing price to earnings ratios of less than 25, forward price to earnings ratios of less than 25, and yields above 2%. You will notice that only one stock from the old list, Agnico, made the cut for the new list.

Agnico Eagle Mines Limited (AEM)

Agnico Eagle is a Canadian based mining company with mines in Canada, Sweden, and Finland. The stock has a trailing P/E ratio of 23.3, a forward P/E ratio of 24.33, and pays a yield of 2.28%. Annual earnings per share growth for the last five years is 79%.

AngloGold Ashanti Limited (AU)

AngloGold, based in Johannesburg, South Africa, has mines in Africa, North America, South America, and Australia. The stock trades at 16.9 times trailing earnings and 12 times forward earnings. The dividend payout rate is 2.11%. Annual earnings per share growth for the last five years is 97%.

B2Gold Corp. (BTG)

The Canada based company, B2Gold, has three operating mines in Mali, the Philippines, and Namibia. The stock has a very favorable P/E ratio of 10.7 and forward P/E of 10.4. Even the price to earnings growth ratio is a commendable 0.53. Annual earnings per share growth for the last five years is 33%.

Sibanye Stillwater Limited (SBSW)

Sibanye is a South African company that has mines in South Africa, the United States, Zimbabwe, Canada, and Argentina. The stock has an excellent price to earnings ratio of 6.2, with a forward P/E of 12.2. Annual earnings per share growth for the last five years is 41%.

Maybe one of these mining stocks can provide your portfolio with a pot of gold.

Disclosure: Author owns BTG

8 Ways to Trade or Invest in Gold in an Inflationary Environment

by Fred Fuld III

You have seen the headlines during the last several months. You have noticed the price increases on Amazon (AMZN), in your supermarket, and even at the dollar stores (which should probably now be called the $1.25 stores). Have you considered using gold as an inflation hedge?

Inflation is here and it’s getting worse. Investors and traders that understand this are now looking for ways to profit from inflation.

Of course no one expects hyperinflation, as was seen in Zimbabwe in 2008.

In Zimbabwe, the country’s peak month of inflation is estimated at 79.6 billion percent month over month, and 89.7 sextillion percent year over year in mid-November of 2008. That’s an inflation rate in numerical terms of 89,000,000,000,000,000,000,000%.

Back then, it cost billions of dollars just to buy basic food items. Inflation was so bad that the country allowed currencies from other countries to be used in April 2009. In 2015, Zimbabwe switched to the U.S. dollar as its national currency.

In 2019, Zimbabwe reintroduced the Zimbabwe dollar, but unfortunately, hyperinflation has hit the country again, measuring 737% last year.

So what is a trader and investor to do? Here are several ways to make gold work for you.

Gold

Gold has long been considered a primary inflation hedge. Over the last 20 years, the price of gold has increased by 597%, which works out to an annualized return of 10.19%. Taking inflation into consideration, gold has gone up by 335%, or 7.622% annualized.

Many studies have shown that gold has provided superior returns during times of inflation. In addition, according to a study at the Stern School of Business at New York University, “overall gold by itself is a safe haven with respect to exhibiting lower volatility in response to shocks or negative return days.”

The big question is, if you want to invest in gold, how should you do it?

Physical Gold

Physical gold means gold that you can hold in your hot little hands. This could either be gold bullion or gold coins.

Gold Bullion

Gold bullion is sometimes referred to as gold bars, similar to the bars in Fort Knox. They can be as small as one gram or as large as 400 ounces (27.5 pounds).

The big advantage of gold bullion is privacy. Bullion bars can be kept anywhere: a home safe, a safe deposit box, or in the ground. Another advantage is that bullion is generally less expensive than gold coins, even bullion gold coins.

Gold Bullion Coins

Gold bullion coins are coins that are issued by governments with a very high gold content, but very little or no numismatic value, but are issued as legal tender. In other words, they sell for very close to the price of gold. These coins include the American Gold Eagle and the Canadian Maple Leaf.

These coins also have the benefit of privacy, but they are also issued in various denominations, making them easier to trade. For example, if you have a one ounce gold bar but you want to sell one quarter of the gold, you would be stuck. However, you do have the ability to own four American Eagle quarter-ounce gold coins, or even ten 1/10th ounce coins.

Many investors believe that the gold coins have better liquidity than bullion. However, the premium on gold coins is higher than the premium on bullion, and the smaller the denomination of the coin, the higher the premium.

Numismatic Gold Coins

Numismatic gold coins are coins which have value due to their scarcity, physical appearance, condition, and many other factors. They are collected by coin collectors.

Double Eagle — National Numismatic Collection, National Museum of American History

The big advantage is that the value of these coins can increase far more than the value of gold, and can even go up in price if the gold price stays the same or even drops. They are less liquid than bullion coins and have a much bigger spread (the price at which you pay for the coin versus what you can sell it for). The other disadvantage is that the coins have a much higher premium than bullion coins.

There is one big estate tax advantage to owning U.S. numismatic gold coins. Talk to your accountant about it. It is currently legal and above board as far as I know, but I am not an accountant or tax attorney. Consult yours.

Gold Securities

Gold ETFs

Gold ETFs are Exchange Traded Funds that have a goal of tracking the price of gold. There are many of them including SPDR Gold Shares (GLD), iShares Gold Trust (IAU), and SPDR Gold MiniShares Trust (GLDM).

There are even some leveraged gold ETFs, such as ProShares Ultra Gold (UGL), which has a goal of providing twice the daily leverage of gold prices.

Gold Mining Stocks

There are many gold mining companies to choose from. The smaller companies are referred to as junior miners (not minor miners). Some of the bigger ones include Newmont Mining (NEM), Barrick Gold (GOLD),AngloGold Ashanti (AU), and Kinross Gold (KGC).

Gold Royalty Trusts

Gold Royalty Trusts do not do any mining. What they do is provide money to mining companies in return for receiving a stream of income based on a percentage of revenues or percentage of gold production.

Some of the biggest gold trusts are Franco-Nevada (FNV), Wheaton Precious Metals (WPM), Royal Gold (RGLD), and Osisko Gold Royalties (OR).

Gold Miners ETFs

Gold Miners ETFs are Exchange Traded Funds that invest in gold mining stocks. VanEck Vectors Gold Miners ETF (GDX) is the largest of these ETFs. VanEck Junior Gold Miners ETF (GDXJ) holds the smaller (junior) mining companies. Direxion Daily Gold Miners Index Bull 2x Shares (NUGT) is a double bullish ETF.

Gold Futures

One other way to invest in gold, which is the most speculative way, is through gold futures. These are exchange-traded contracts to buy or sell a specific amount of gold in the future at a specified price. The returns can be substantial but so are the risks, as your losses can far exceed the original investment that you put up.

How Much Should You Invest in Gold

Many financial advisors recommend that you hold a small amount of gold, up to 5% to 10% of your portfolio as a hedge. Hopefully, gold will make your portfolio sparkle and shine.

Disclosure: Author is long AMZN, GLD, WPM, and OR.