The U.S. Federal Reserve now anticipates just two interest rate cuts next year, a reduction from the four previously forecasted in September, due to inflation concerns and the potential economic impact of President-elect Donald Trump’s proposed trade tariffs. On November 18, in the immediate aftermath of the Fed’s announcement, the U.S. dollar surged, with the dollar index reaching a two-year high. This rally placed downward pressure on gold prices, which fell 2% to their lowest levels in a month. Traditionally, a stronger dollar and higher U.S. Treasury yields make gold less attractive as an investment. However, analysts suggest that these traditional relationships between gold, the dollar, and interest rates have become less predictable in recent years.
In an interview with CNBC on December 18, Thomas Rupf, Chief Investment Officer and Head of Trading at VP Bank Asia provided detailed insights into the current market conditions and future projections for the U.S. dollar and gold. Rupf acknowledged the resilience of the U.S. dollar and attributed it to the perception of the continued strength of the U.S. economy. However, he also pointed out that the U.S. dollar is currently overvalued and expects the US economy to slow down, which could contribute to a weaker US dollar by the end of next year.
Regarding gold, Rupf is optimistic and noted that the potential slowdown in the US economy and dollar as well as the ongoing trend of de-dollarization are all bullish factors for gold prices. He mentioned that ETF flows, which are still 20% below historical levels, indicate that there is significant room for retail investors to increase their investment in gold ETFs. Rupf concluded by agreeing that gold prices could realistically reach $2,800 to $2,900. He also mentioned the possibility of gold reaching up to $3,000, which he considers the top end of his forecast.
Gold has historically been recognized as a reliable investment, known for its enduring value and resilience against economic uncertainties. This precious metal has been a cornerstone in many diversified investment portfolios, offering a sense of security and stability in times of financial turmoil. With that in context, let’s take a look at the 10 best gold royalty and small-cap gold stocks to buy.
Drills extracting gold from a gold mine, revealing the company’s gold mining operation.
Our Methodology
To compile our list of the 10 best gold royalty and small-cap gold stocks to buy, we used Finviz and Yahoo stock screeners to find the companies that are involved in the production, extraction, processing, financing, or sale of gold and have a market capitalization between $200 million and $10 billion as of December 23. Then we used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Gold Royalty and Small-Cap Gold Stocks to Buy
10. Metalla Royalty & Streaming Ltd. (NYSEAMERICAN:MTA)
Number of Hedge Fund Investors: 8
Market Capitalization as of December 23: $236.02 Million
Metalla Royalty & Streaming Ltd. (NYSEAMERICAN:MTA) is a leading precious metals royalty and streaming company, headquartered in Vancouver, Canada. The company’s primary focus is on acquiring and managing a diversified portfolio of royalties and streams, predominantly in gold and silver.
Metalla Royalty & Streaming Ltd. (NYSEAMERICAN:MTA) is actively expanding its portfolio of royalties and streams to ensure a robust and diversified revenue stream. The company has recently achieved a significant milestone with its first royalty payments from the Tocantinzinho project, where it received 648 Gold Equivalent Ounces (GEOs) at an average realized price of $2,481 per GEO. This success is expected to continue as production scales up to full capacity by the fourth quarter of 2024 and into 2025. Additionally, Metalla Royalty & Streaming Ltd. (NYSEAMERICAN:MTA) is looking forward to the commencement of production at the Endeavor project, which is slated to begin production in the first half of 2025.
Metalla Royalty & Streaming Ltd. (NYSEAMERICAN:MTA) holds a 2.5% GVR royalty on the northern and southern extensions of the Fosterville mining license, where Agnico Eagle continues to focus on productivity gains and cost control. Additionally, the company holds a 5.0% NSR royalty on the South Domes area of the Castle Mountain mine, where Equinox Gold Corp. is making significant progress in the permitting process. These projects are expected to generate significant and sustainable cash flow while maintaining a low operational risk profile, positioning the company to capitalize on the growth and development of the mining industry.
9. Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Investors: 16
Market Capitalization as of December 23: $1.20 Billion
Centerra Gold Inc. (NYSE:CGAU) is a Canadian-based gold mining company with operations in North America and Asia. The company’s major assets include the Mount Milligan Mine in Canada and the Öksüt Mine in Turkey. Centerra Gold Inc. (NYSE:CGAU) also owns the Goldfield District Project in Nevada and the Kemess Project in British Columbia.
Centerra Gold Inc. (NYSE:CGAU) is focusing on enhancing the performance of its existing mines, particularly at Mount Milligan in British Columbia and Öksüt in Turkey. At Mount Milligan, the company has implemented a site-wide optimization program that includes continuous improvements in safety, productivity, and cost efficiency. This program has already shown positive results, with a 12% reduction in milling costs in the first nine months of 2024 compared to the same period last year. The company is also working on a preliminary economic assessment (PEA) for Mount Milligan, which aims to extend the mine’s life and identify value-added initiatives. The PEA is expected to be completed by the end of the first half of 2025.
Centerra Gold Inc. (NYSE:CGAU) is actively exploring new growth opportunities to expand its gold portfolio. The company is progressing with the Goldfield project in Nevada, where an initial resource estimate is expected to be released in early 2025. Additionally, the company is evaluating alternative technical concepts for the Kemess project in British Columbia, aiming to identify a viable path for future gold and copper production. These initiatives are part of the company’s broader strategy to diversify its asset base and ensure sustainable long-term growth.