According to a report by the World Gold Council published on December 13, gold is on track for its strongest annual performance in more than a decade, with prices rising 28% year-to-date through November 2024. This surge has been fueled primarily by robust central bank purchases and heightened investor demand.
Looking towards 2025, the outlook for gold is shaped by a complex interplay of interest rates, economic growth, and global risks. The US Federal Reserve is expected to implement 100 basis points of rate cuts by year-end, and European central banks may follow suit with similar reductions. These actions are likely to provide a supportive environment for gold. However, potential challenges such as trade wars, rising inflationary pressures, and disruptions to supply chains could weigh on the metal’s performance. The Federal Reserve’s actions will play a central role in determining gold’s direction in 2025. Historically, gold has shown strong gains in the initial phases of rate-cutting cycles, averaging a 6% increase during the first six months.
Global economic conditions, particularly in Asia, also play a pivotal role in gold’s demand. China and India, which collectively account for more than 60% of annual gold demand excluding central banks, remain critical to the metal’s long-term prospects. In China, gold demand will hinge on consumer confidence and the broader economic outlook, which may be influenced by government stimulus measures and trade policy developments. India, on the other hand, is already well-positioned with strong economic growth of above 6.5%. Central banks have been net buyers of gold for nearly 15 years, a trend driven by the metal’s role as a long-term store of value and a hedge against geopolitical and financial risks. In 2024, central bank purchases, though slightly below record levels, remained robust, contributing an estimated 7%-10% to gold’s price increase. The report forecasts that central bank demand in 2025 will exceed the long-term average of 500 tonnes, further supporting gold prices. However, a significant slowdown in purchases could introduce downward pressure.
In an interview with CNBC on December 3, Ross Beaty, Chair of Equinox Gold Corporation, discussed the current and future prospects of the gold market. Beaty emphasized that all the bullish factors driving the strong performance of gold in 2024 are still intact, including a strong dollar, inflation outlook, and a favorable gold supply. He is optimistic about gold’s performance in 2025, expecting another excellent year for the precious metal.
However, Beaty noted a puzzling disconnect between the rising gold prices and the flat or declining performance of gold equities. Beaty, who has been involved in the gold sector for nearly 40 years, said that he has never seen something like this and this anomaly will likely correct itself in 2025. He emphasized that there is no reason why the gold price will decline and that it means there will be a great bull market in gold equities in 2025.
Beaty also addressed the potential for further consolidation in the gold mining sector. He highlighted that the mining industry, particularly gold mining, is inherently acquisitive due to the natural decline of mines over time. 2024 saw significant M&A activity in the gold space, and Beaty expects this trend to continue.
Investing in gold has long been considered a reliable strategy for preserving wealth and hedging against economic uncertainties. Beyond physical gold, many investors turn to gold stocks, which offer exposure to the precious metal while benefiting from the potential for growth in mining operations and technological advancements. With that in context, let’s take a look at the 12 most promising gold stocks according to hedge funds.
A man, dressed in protective gear, holding a golden nugget freshly extracted from an underground mining shaft.
Our Methodology
To compile our list of the 12 most promising gold stocks according to hedge funds, we used Finviz and Yahoo stock screeners to find the 30 largest companies that are involved in the production, extraction, processing, or sale of gold. We then used Insider Monkey’s Hedge Fund database to rank 12 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).
12 Most Promising Gold Stocks According to Hedge Funds
12. Gold Fields Limited (NYSE:GFI)
Number of Hedge Fund Investors: 22
Gold Fields Limited (NYSE:GFI) is a prominent global gold mining company with a diverse portfolio of assets located in South Africa, South America (Chile and Peru), Ghana, Australia, and Canada. The company’s world-class asset base is supported by over 20 years of gold reserves.
Gold Fields Limited (NYSE:GFI) is focusing on addressing operational challenges that affected its production in the first half of 2024. These challenges were primarily due to issues at the South Deep mine in South Africa, the Gruyere mine in Australia, and delays in ramping up the Salares Norte project in Chile. In Q3, Gold Fields Limited (NYSE:GFI) produced 510,000 ounces of gold, which is an improvement from 454,000 ounces in the second quarter but a decline compared to 542,000 ounces in the same quarter of the previous year. Similarly, the company’s All-in sustaining costs (AISC) for the quarter were $1,694 per ounce, down from $1,751 per ounce in the second quarter but higher than $1,381 per ounce in Q3 of the previous year. The company aims to expand its production by ramping up operations at its new Salares Norte mine in Chile, alongside advancements in existing mines such as South Deep where they’ve seen significant production increases through improved stope availability and drilling techniques.
On November 6, Reuters reported that Gold Fields Limited (NYSE:GFI) may consider selling its smaller mines in Ghana and Peru to concentrate on its larger operations. CEO Mike Fraser indicated that the company is simultaneously exploring new mineral discoveries at these sites to enhance their value. Furthermore, Gold Fields Limited (NYSE:GFI) is also actively developing projects from their recent acquisition of Osisko Mining to boost production in the future.
11. Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Investors: 23
Wheaton Precious Metals Corp. (NYSE:WPM) is a leading precious metals streaming company with a robust portfolio of long-life, low-cost assets. Through its streaming model, the company secures the right to purchase a portion of the metals produced by a mine in exchange for an upfront payment and additional payments upon metal delivery.
Wheaton Precious Metals Corp. (NYSE:WPM) is strategically expanding its portfolio through partnerships and accretive transactions. In Q3, the company announced the expansion of its existing stream on Rio2’s Phoenix project with an additional $100 million investment. The company also entered a new $625 million gold stream agreement on Montage’s Kona project in Côte d’Ivoire, which is one of the highest-quality gold projects in Africa with a 16-year mine life. On December 5, the company secured a $175 million streaming deal with Allied Gold for the Kurmuk project in Ethiopia. Under this agreement, Wheaton Precious Metals Corp. (NYSE:WPM) will make upfront payments in four installments during the construction phase and receive 6.7% of payable gold until 220,000 ounces are delivered, after which it will purchase 4.8% of payable gold for the remainder of the mine’s life. This deal will add 180,000 ounces of proven and probable mineral gold reserves, 20,000 ounces of inferred gold resources, and 30,000 ounces of measured and indicated mineral gold resources to the company’s portfolio.
Wheaton Precious Metals Corp. (NYSE:WPM) is also advancing several development projects that are expected to commence gold production within the next year, including Blackwater, Goose, PlatReef, and Mineral Park. These projects are anticipated to drive a significant increase in gold production, with a growth rate of approximately 40%, exceeding 800,000 ounces annually by 2028.