In this article, we discuss 10 Best Gold Stocks to Invest in for Portfolio Diversification.
Gold is one asset class that continues to captivate the financial markets, with prices rallying to record highs and showing no signs of slowing down. After powering to record highs of $2,790 an ounce last year, the precious metal is again edging higher, having powered through the $2900 level and on the cusp of the $3,000 psychological level.
The rally to record highs comes against escalating geopolitical tensions and economic uncertainty. While Israel has reached a cease-fire on the Gaza Strip, tensions are far from over with the ever-growing threat from Iran and the ongoing Russia-Ukraine conflict. Similarly, US President Donald has evoked economic uncertainty with a string of trade tariffs that threaten to plummet the global economy into disarray.
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“Central focus of the gold market continues to be the uncertainty in regards to the Trump tariff policies,” said David Meger, director of metals trading at High Ridge Futures.
China’s retaliatory measures against US tariffs are increasingly fueling safe-haven demand, exacerbated by the US threatening to hit Canada, Mexico, and Europe with similar tariffs. The geopolitical tensions and economic uncertainties are why analysts at Citi are optimistic about gold powering through the $3,000 an ounce level amid strong demand as a safe haven in times of turmoil and uncertainty.
As a result of Trump’s tariff threats, which have increased investor anxiety over global growth, trade wars, and high inflation, gold has already reached its seventh-record high this year. Gold’s explosive rally since December, according to Phillip Streible, chief market strategist at Blue Line Futures, may result in a self-fulfilling prophecy of additional price increases, which could cause the research firm to increase its forecast to about $3,250 or $3,500. Analysts at UBS share similar sentiments and expect a gold price rally to persist in 2025 to above the $3,000 an ounce level.
While data from the World Gold Council indicates that gold demand hit record highs of 4,974.5 metric tons last year, the buying momentum is unlikely to stop. Central banks are increasingly purchasing precious metals, which are seen as a solid store of value away from the dollar and other assets susceptible to heightened market volatility. Higher rates lessen the allure of the non-yielding asset, but historically, bullion has been seen as a hedge against inflation and geopolitical unpredictability.
“Gold prices could reach $3,000 this year due to the disruptive nature of the current U.S. administration creating market uncertainty and central banks potentially increasing gold purchases to diversify from U.S. dollar holdings,” Jim Wyckoff, a senior market analyst at Kitco Metals, said.
Gold provides stability during economic turbulence. Its adaptability and timeless appeal have increased its value over centuries. As market uncertainties persist, gold stocks are gaining popularity among investors due to their potential for higher prices and secure store of value.
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Our Methodology
To make the list of 10 best gold stocks to invest in for portfolio diversification, we scanned the US market and settled on the top gold companies with significant resource reserves. We then analyzed the stocks and settled on those with solid underlying fundamentals and tremendous potential as long-term investment plays. Finally, we ranked the stocks in ascending order based on the number of hedge fund holders.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. 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).
Best Gold Stocks to Invest in for Portfolio Diversification
10. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 23
Wheaton Precious Metals Corp. (NYSE:WPM) primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. Rather than running actual mines, Wheaton gives mining companies money to help them pay for some of the costs associated with mine development. In return, it can purchase a portion of the metal the mines produce at predetermined prices.
Wheaton Precious Metals Corp. (NYSE:WPM) makes a lot of money because it focuses on streaming. Wheaton pays dividends to shareholders and invests the funds in new ventures. With a flexible dividend policy, the company distributes dividends totaling over 25% of its revenue. Like a mining company, Wheaton is able to benefit from rising gold and silver prices thanks to its business model. It is a less risky method of investing in precious metals like silver because it takes on fewer risks and the possible cost overruns that come with physical mining.
Wheaton Precious Metals Corp. (NYSE:WPM) has over 20 long-term purchase agreements with 17 mining companies for precious metals and cobalt, with streaming agreements covering 19 operating mines and 9 development projects. Notable projects include Vale’s Salobo mine and silver streams on Glencore’s Antamina and Goldcorp’s Penasquito mines.
9. Coeur Mining, Inc. (NYSE:CDE)
Number of Hedge Fund Holders: 28
Coeur Mining, Inc. (NYSE:CDE) is a basic materials company that explores precious metals. It primarily explores gold, silver, zinc, and lead properties. While the stock was up by 152% in 2024, it’s already up by 13% for the year. The rally came as the company continued to report record production in all its operations, which drove a 21% increase in gold production in the third quarter.
Its gold production in the third quarter stood at 94,993 ounces, with 3 million ounces of silver production. Its profit margin received a significant boost as the cost to sales per gold and silver ounce dropped 12%, affirming operational efficiency. Coeur Mining, Inc. (NYSE:CDE) is positioned as a strong performer in the market with room to grow thanks to its growing operations and strategic initiatives.
Additionally, Coeur Mining, Inc. (NYSE:CDE) has moved to strengthen its long-term prospects with an agreement to buy SilverCrest Metals for $1.7 billion and gain access to the Las Chispas Mine. It is anticipated that the Las Chispas mine, one of the world’s most affordable and superior silver/gold operations, will yield 21 million ounces of silver per year.
