While supply chain shortages from the pandemic remain a challenge, commodities remain in demand. According to experts like Timothy Ord, chairman and editor of The Ord Oracle, as metal prices look set to double, gold stocks could see 10X gains over the next 3 years. Wall Street estimates are also bullish for 2021, with Goldman and Citibank both expecting gold to break through around $ 2,300 to $ 2,400 an ounce. After a year of decline after historic highs of 2,075 in August 2020, gold looks set to resume a long-term uptrend that began in September 2018.
What are the best gold stocks to buy now to increase returns over the medium to long term? We have identified three opportunities in different types of gold stocks, while highlighting disruptive technological projects.
A bullish case for gold
After closing May 2021 with an impressive 7.6% gain, gold prices show that the bulls are once again in charge, supported by fundamental and technical indicators.
Basically, trillions of government stimulus packages were pumped into economies to cushion the blow against COVID-19, initially fueling tech stocks. The amount of money in the US economy alone, as measured by M2 money supply, increased by 26% in the year starting February 2020. With massive amounts of cash in the system, investors are starting to research rare safe-haven assets that cannot be created. out of thin air, including gold and cryptocurrencies.
Now that many countries are facing post-pandemic normalcy, investors are also anxiously awaiting when central banks may put the brakes on liquidity. Consumer prices around the world hit their highest levels in 12 years in April, raising fears that rising inflation could dampen the recovery. Historically, gold has been a protective hedge against inflation.
Technically, gold is trading inside an ABC Fibonnaci retracement formation that started Jan 6 at 1959, continuing with a double bottom in March around 1677. Point C was a downturn. critical breakthrough on May 15 at 1,844, favoring a run to a high of 1,965 in November 2020.
A breakout of 1,965 would trigger bear stop losses and encourage buying sentiment. This could fuel gold prices above the critical 2,000 level, with gold prices coming to a halt at an all-time high of $ 2,075 an ounce.
Asia Broadband (AABB): Merging the forces of the old and new world
Asia Broadband, Inc (OTC: AABB) focuses on the production, supply and sale of precious and base metals primarily in Asia. It acquires very promising gold projects in Latin America and distributes the production through an extensive global sales network. AABB is trading in consolidation mode, ripe for a breakout after hitting recent highs in February. Since the start of the year, the stock is up more than 1,500%.
Listed as AABB on the OTC market, Asia Broadband now offers the AABB Gold Token as a new source of income for the company. The AABB Gold Token (AABBG) is a hybrid cryptocurrency with a limited supply backed 100% by physical gold. AABBG is linked to the price of gold, at a minimum of 0.1 gram of spot. The company is building bridges between the safe haven structure of gold and the scarcity, flexibility and upside potential of the crypto world. As a result, the unique token mine product can become a global, secure and reliable trading standard with golden backing.
As they strive to reduce debt, AABB currently holds over $ 100 million in assets, 5 times more than the previous year. Once their exclusive cryptocurrency exchange launches in early September, AABB will also benefit from transaction fee income. Against the backdrop of gold bullish trends, AABB is launching an international campaign to boost token sales, creating shareholder value and a competitive advantage over other mining companies.
Barrick Gold: Strong Operations Through Old World Mining
Barrick Gold is one of the largest producers of gold in the world. It operates mining projects in Argentina, Canada, United States and owns copper mines in Chile.
Traded as GOLD on the New York Stock Exchange, the company announced an 8.6% increase in sales between the first quarter of 2020 and the first quarter of 2021. GOLD stock has recently shown weakness but is remained slightly above its 200-day moving average.
According to The Street Quant Ratings, Barrick Gold Corporation is a âbuyâ stock with a target price of $ 27.56. “The strengths of the company can be seen in many areas, such as revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth net income and good operating cash flow. “
Notably, CEO Mark Bristow tried to outrun the crypto company, stating that Bitcoin and other cryptocurrencies will never replace gold and are just bubbles. At the same time, he recognizes that the crypto boom means that the precious metals industry needs to redouble its efforts to create usable assets.
VanEck Vectors Gold Mining ETFs
VanEck Vectors Gold Miners (GDX) is an ETF that seeks to replicate the price and return performance of the NYSE Arca Gold Miners Index before fees and expenses. The fund invests over 80% of its total assets in the gold mining industry.
Research firm CFRA classifies GDX as a 4-star ETF. The ETF has achieved a return of 15.93% over the past 12 months, while posting a 3-year average CAGR of 21.39%.
Investors are looking for GDX as a diversified way to follow the entire gold mining industry and spot gold market. Since it trades more like an index, the volatility of GDX will generally be lower than that of any name. Given the uptrend in gold prices, the ETF offers the opportunity to gain exposure to the gold sector, without the sudden fluctuations in exposure to a single name.
What is the best gold share to buy?
For thousands of years, gold has been a globally recognized store of value. Historians cannot tell the story of mankind without gold. He came from the stars, funded amazing adventures, and now we’re even looking for him on Mars.
Look for gold companies that are aggressive in revolutionizing their business, adding new business streams in line with technological changes. The intersection of blockchain technology and gold offers an exciting path to marry an old world standard with a new digital revolution. Companies that believe in and adapt to change are in the best position to thrive.
This article does not necessarily reflect the views of the editors or management of EconoTimes.