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Motley Fool: 3 Gold Stocks Shrewd Investors Must Acquire

Motley Fool: 3 Gold Stocks Shrewd Investors Must Acquire

(Dollar Photo Club)

By    |   Friday, 16 December 2016 05:57 AM

The Motley Fool is telling savvy investors that while the precious metal may be struggling to remain at lofty levels, it’s the perfect time to buy some gold-related stocks.

“Three gold stocks look particularly compelling today from a long-term perspective: Barrick Gold (NYSE:ABX), Royal Gold (NASDAQ:RGLD), and Agnico Eagle Mines (NYSE:AEM),” the Fool advised.

The Fool explains that Barrick Gold dominated the industry because of three reasons:

It turned in a profit of $175 million, compared to losses of $264 million in the year-ago quarter.

It lowered its all-in-sustaining-costs (AISC) guidance for the full year to between $740 and $775 per ounce.

It upped its full-year gold production guidance to between 5.25 million and 5.55 million ounces.

As for Royal Gold, it “doesn't own and explore mines like Barrick, but buys precious metals from miners at fixed costs in exchange for up-front funding. That offbeat business model makes Royal Gold an intriguing and compelling investment choice,” the Fool said.

“Royal Gold leverages investors to gold prices with significantly low risks. That, perhaps, is the biggest argument in favor of investing in the company. For investors, that also means stable and growing dividends -- Royal Gold has raised its dividends for 16 straight years,” the Fool said.

For Agnico, its operations “aren't as heavily exposed to geopolitical risks as senior miners, as its mines are located in relatively stable regions like Canada, Finland, and Mexico,” the Fool said.

“Agnico's established resource base, low costs, and stable cash flows should be rewarding for shareholders in the long run.”

To be sure, a day after the Federal Reserve signaled rates will rise next year faster than expected, the Labor Department released data showing fewer Americans filed for applications for unemployment benefits, validating policy makers’ view of a vigorous labor market. The dollar climbed to the highest in more than a decade, diminishing the appeal of gold as an alternative investment, Bloomberg reported.

After its best first half in almost four decades, gold’s gains for the year have deteriorated, with prices headed for the worst quarterly loss in more than three years. Sentiment turned negative for bullion as investors found better returns elsewhere, with U.S. equities rising to records, the dollar strengthening and Treasury yields climbing amid speculation that President-elect Donald Trump’s spending plans may accelerate the nation’s growth.

“The economy seems to be doing good, and you’ve also got the Trump effect, which has been bad for gold and good for stocks,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “We’re recommending to short gold. There’s really no reason to own gold.”

Gold futures for February delivery slipped 2.9 percent to $1,130.40 an ounce at 10:42 a.m. on the Comex in New York, after touching $1,127.40, the lowest for a most-active contract since February.

While traders unanimously predicted the Fed would raise borrowing costs on Wednesday, new projections show Fed officials expect three quarter-point rate increases in 2017, up from the two seen in the previous forecasts in September, based on median estimates.


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The Motley Fool is telling savvy investors that while the precious metal may be struggling to remain at lofty levels, it's the perfect time to buy some gold-related stocks.
gold, stocks, invest, precious
Friday, 16 December 2016 05:57 AM
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