3 Gold Mining Stocks to Hedge Against Inflation

Follow by Email
Visit Us
Follow Me

The Federal Reserve’s recent policy statement reveals that inflation remains “elevated.” The Personal Consumption Expenditures price index rose at a 2.8% annual rate in April, well above the Fed’s 2% target. This persistent level of inflation has investors searching for reliable hedges, and gold mining stocks are emerging as a prime choice.

Therefore, investors could consider buying quality gold mining stocks such as Barrick Gold Corporation (GOLD), Harmony Gold Mining Company Limited (HMY), and Kinross Gold Corporation (KGC) to hedge against inflation.

Gold has always been the go-to asset in times of financial uncertainty, and 2024 is shaping up to be no exception. The World Gold Council’s latest report paints an optimistic picture, predicting stronger returns for gold than previously expected.

Their Gold Demand Trends report for the first quarter reveals a 3% year-over-year increase in total global gold demand to 1,238 tonnes, the highest first-quarter demand since 2016. Additionally, mine production hit a record 893 tonnes, up 4% from last year.

Moreover, the outlook for gold prices remains bullish amidst global economic uncertainty. Bank of America Corporation (BAC) analysts project that gold could soar to $3,000 per ounce within the next 12-18 months, driven by increased non-commercial demand and potential Federal Reserve rate cuts. Such a scenario would likely lead to significant inflows into physically backed gold ETFs and boost trading volumes.

And let’s not overlook central banks, which are ramping up their gold purchases to reduce USD holdings in foreign exchange portfolios. This strategic shift underscores yellow metal’s status as a long-term store of value, a hedge against inflation, and an indispensable portfolio diversifier.

Furthermore, investors’ interest in gold stocks is evident from the iShares Gold Trust Micro ETF’s (IAUM) 22.2% gains over the past nine months.

To that end, let’s examine the fundamentals of the three stocks to buy in the Miners – Gold industry, beginning with the third choice.

This article was originally published on this site