{"id":3082,"date":"2024-10-02T01:50:09","date_gmt":"2024-10-02T01:50:09","guid":{"rendered":"https:\/\/investingsstrategist.com\/index.php\/2024\/10\/02\/is-now-a-good-time-to-invest-in-gold-stocks-updated-2024\/"},"modified":"2024-10-02T01:50:09","modified_gmt":"2024-10-02T01:50:09","slug":"is-now-a-good-time-to-invest-in-gold-stocks-updated-2024","status":"publish","type":"post","link":"https:\/\/investingsstrategist.com\/index.php\/2024\/10\/02\/is-now-a-good-time-to-invest-in-gold-stocks-updated-2024\/","title":{"rendered":"Is Now a Good Time to Invest in Gold Stocks? (Updated 2024)"},"content":{"rendered":"

After ending 2023 well above the important US$2,000 per ounce mark, gold has stayed on an upward trajectory in 2024, continuing to hit new price milestones quarter after quarter. <\/strong><\/p>\n

In September, gold achieved a new record high above US$2,600 after the US Federal Reserve cut its benchmark interest rate for the first time since it began a rapid hiking cycle in 2022.<\/p>\n

While this rise has excited market watchers, some are disappointed that gold stocks haven\u2019t outpaced the metal\u2019s meteoric climb. What\u2019s weighing on gold stocks, and is now a good time to invest? <\/p>\n

\n

How are gold stocks performing compared to gold? <\/h3>\n

As of October 1, the gold price was up around 30 percent year-to-date. <\/p>\n

Meanwhile, the VanEck Gold Miners ETF (ARCA:GDX) and the VanEck Junior Gold Miners ETF (ARCA:GDXJ), two widely tracked gold stock exchange-traded funds, were up about 32 and 33 percent, respectively, in the same period. <\/span><\/p>\n

Gold equities are generally expected to provide outsized gains compared to the metal, leaving market participants understandably disappointed with their performance so far this year. <\/p>\n

But as John Kaiser of Kaiser Research pointed out, there\u2019s some nuance to the situation.<\/p>\n<\/div>\n

<\/span><\/p>\n

Watch the interview above for more from Kaiser, including the stocks he\u2019s watching. <\/em><\/em><\/p>\n

\u2018It\u2019s not the case that the gold producers, the majors and intermediates, have failed to respond. The gold majors, not counting the ones that have problems, they\u2019re up 45 to 90 percent from where they were when gold bottomed in February, and the intermediates are up from 50 percent to 132 percent,\u2019 he explained. <\/p>\n

This type of movement is typically what\u2019s seen in a gold bull market \u2014 once the metal itself starts rising, major gold miners are the first to follow, along with gold royalty and streaming companies, followed by developers and juniors. <\/p>\n

With those first categories gaining momentum, gains for juniors should be building. <\/p>\n<\/div>\n

\n

Is now a good time to buy gold stocks? <\/h3>\n

Gold stocks have begun to respond to a higher gold price, but what happens if there\u2019s a recession in the US?<\/p>\n

\u201cThe other thing that I find very interesting is that the gold stocks outperform the S&P 500 (INDEXSP:.INX) in every recession,\u201d Day added. \u201cIf you expect a recession coming, particularly if you expect a stagflationary period, then you definitely want to have gold, you definitely don\u2019t want to be in the S&P and you probably want to be in gold stocks.\u201d<\/p>\n<\/div>\n

<\/span><\/p>\n

Watch the interview above for more from Durrett on gold and gold stocks. <\/em><\/p>\n

\u201cAs the US economy goes into a recession you\u2019re going to have a lot of foreign money pulling out of the US,\u201d he said, noting that 40 percent of the US stock market is foreign investors, and that figure is about 30 percent for US bonds. <\/p>\n

Once those foreign buyers become sellers, there will be downward pressure on the US dollar. Durrett said this is not only price positive for gold, but those investors will also most likely reallocate their funds to the metal.<\/p>\n

What does this mean for investors looking to time their buying of gold stocks? <\/p>\n

Durrett, who feels that the bottom for gold stocks came in February of this year, said he is watching the HUI Gold Index (INDEXNYSEGIS:HUI), also known as the NYSE Arca Gold BUGS Index, which tracks 16 gold companies.<\/p>\n

<\/span>When the index is trading between US$225 to US$300, it\u2019s a clear sign of a buying opportunity in the gold-mining sector. Once the index is in the US$300 to US$325 range, Durrett warned \u2018the train is about to leave the station\u2019 as a bull market is imminent. When the HUI Gold Index is in the US$350 to US$400 range, it signals \u201ca last chance\u201d for investors. <\/p>\n

Durrett said that he believes investors will see that last chance in the fourth quarter of this year. <\/p>\n

As of October 1, the HUI Gold Index was trading at US$325.67, up more than 36 percent year-to-date.<\/p>\n

John Feneck of Feneck Consulting also thinks the time is ripe for gold stocks. <\/p>\n<\/div>\n

<\/span><\/p>\n

Watch the interview above for more from Feneck on his stock picks. <\/em><\/p>\n

Ongoing economic uncertainty and geopolitical tensions will continue to plague the markets, and this bodes well for a sector rotation out of the broader equities into safe-haven gold. <\/p>\n

Feneck is keen on the VanEck Gold Miners ETF as a way to get exposure to gold stocks, and pointed out that about a third of its assets under management consist of Agnico Eagle Mines (TSX:AEM,NYSE:AEM), Newmont (TSX:NGT,ASX:NEM,NYSE:NEM) and Barrick Gold (TSX:ABX,NYSE:GOLD), which all released excellent earnings in the most recent quarter, including huge margins given record gold prices.<\/p>\n

\u201cThis is just like printing money for these companies,\u201d he said.<\/p>\n<\/div>\n

\n

The missing puzzle piece for gold stocks <\/h3>\n

He suggested that if Republican presidential candidate Donald Trump loses the US election and doesn\u2019t accept the outcome, that could be a possible trigger for investor interest in gold and gold stocks. <\/p>\n

\u201cThere is also the ongoing geopolitical conflict between the global east squaring off against the global west, and the global south looking around at who butters their bread better,\u2019 he said. <\/p>\n

\u2018And right now China can butter everybody\u2019s bread better than America can or will. So regardless of the outcome (of the election) we\u2019re going to see gold trend higher, and that\u2019s I think what\u2019s going to be the trigger.\u201d<\/p>\n

Feneck suggested a catalyst could be a broad market selloff of at least 10 to 15 percent. But he does see signs already that generalist investors are beginning to come back to gold.<\/p>\n

\u201dNow that gold is at US$2,500, it\u2019s catching the attention of a lot of portfolio managers, hedge funds and private equity,\u201d he explained. \u201cPeople that were not even interested in gold or gold stocks at the beginning of the year are starting to really take notice of our sector, which I think is the most bullish thing we can say.\u201d<\/p>\n<\/div>\n

\n

Investor takeaway <\/h3>\n

While gold stocks as a group aren\u2019t yet outperforming gold itself, experts remain optimistic about the sector, with many believing that current gold company valuations present good entry points for investors.<\/p>\n

However, market participants should continue to do their own research before jumping into the sector, and should keep in mind that it may be difficult for gold stocks to gain momentum without interest from generalist investors.<\/p>\n<\/div>\n

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

After ending 2023 well above the important US$2,000 per ounce mark, gold has stayed on an upward trajectory in 2024, continuing to hit new price milestones quarter after quarter. In September, gold achieved a new record high above US$2,600 after the US Federal Reserve cut its benchmark interest rate for the first time since it […]<\/p>\n","protected":false},"author":0,"featured_media":3083,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-3082","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/posts\/3082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/comments?post=3082"}],"version-history":[{"count":0,"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/posts\/3082\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/media\/3083"}],"wp:attachment":[{"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/media?parent=3082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/categories?post=3082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/investingsstrategist.com\/index.php\/wp-json\/wp\/v2\/tags?post=3082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}