We recently compiled a list of the 11 Best Gold Stocks for Inflation. In this article, we are going to take a look at where Centerra Gold Inc. (NYSE:CGAU) stands against the other gold stocks.
History has shown that gold has always been one of the most secure stores of value, especially during times of economic uncertainty and downturns. This is also apparent from the sheer size of the global gold market, which Fortune Business Insights has forecasted to increase from $291.68 billion in 2024 to $457.91 billion by 2032. With looming concerns of trade wars and inflation, the surge in gold demand led gold prices to an all-time high of $2,830.49 per ounce on February 3, 2025, as reported by Reuters.
Gold posted a one-year return of 43.83%, surpassing the broader market’s 20.89% return for the same period, as reported on Yahoo Finance. In 2024, gold ETFs marked their best performance since 2010 as they surged 26%. Gold futures jumped over 1% to $2,670 per ounce. The Gold ETF holds a rating of 79 and trades above its 50-day moving average. Over the past six months, gold prices rose from $2,500 per ounce on August 5, 2024, to $2,830.49 per ounce on February 3, 2025. This 17.09% increase stemmed from concerns about rising inflation and tariffs imposed by President Donald Trump, including a 25% on Canadian and Mexican imports and a 10% levy on Chinese goods. All these factors, along with market volatility, have further pushed the demand for gold upwards.
Furthermore, according to Reuters, trade obstructions around the globe have also increased inflationary pressures. Tariffs imposed by China-including 15% on U.S. coal and LNG and 10% on crude oil and machinery-are projected to increase global trade costs by $50 billion in retaliation. This rise in production costs and inflationary pressures, coupled with supply chain disruptions, will further set the stage for gold to remain one of the best sources of hedging in the face of economic instability.
Given this surge in demand and importance, gold prices are forecast to remain between $2,905 and $4,042 in 2025. Analysts at JPMorgan expect gold to reach $3,000 per ounce in 2025 due to economic instability and strong central bank demand.
Inflationary pressures in the United States are also expected to persist. A U.S. inflation indicator, the Personal Consumption Expenditures (PCE) Price Index, increased to 0.3% in December 2024, marking its highest monthly gain since April 2024. During the last quarter of 2024, consumer spending increased by 0.7%, while labor costs surged by 0.9%.
On the other hand, supply and demand are key drivers of the gold market. Due to higher premiums offered in U.S. gold futures markets, gold is unexpectedly flowing from Dubai and Hong Kong to the United States. Hence, according to Reuters, U.S. Comex gold inventories have been experiencing a prominent increase. A report discussed in an Insider Monkey article has also projected increased demand by the central bank in 2025, exceeding the long-term average of 500 tons, further supporting gold prices.
As evident from the discussion above, gold has established itself as one of the most important assets for preserving value against inflation and continues to hold that title.
Methodology
To create our list of the 11 Best Gold Stocks for Inflation, we identified the most valuable gold stocks with a market cap greater than $500 million. We then shortlisted stocks that reported a dividend yield of at least 1% as of the time of writing. This ensured that these companies provided a good hedge against inflation. From these, we selected the top 11 stocks and arranged them in ascending order based on hedge fund sentiment, according to Insider Monkey’s database of Q3 2024.
Why are we interested in 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).
Aerial view of modern machinery operating in a gold mining site.
Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Holders: 17
Dividend Yield: 3.02%
Centerra Gold Inc. (NYSE:CGAU) is a gold and copper producer based in Canada and operates mainly in North America and Turkey. The company’s major assets include the Mount Milligan mine in Canada (copper and gold), the Öksüt mine in Turkey (gold), and the Thompson Creek mine (molybdenum) in the U.S.
The company produced 93,000 ounces of gold at an average price of $2,206 per ounce during the third quarter ended September 30, 2024. As a result of strong production and elevated gold prices, Centerra Gold’s free cash flow amounted to $37 million during the quarter, while it held $604 million in cash. This brought the total liquidity of the company to a whopping $1 billion. This allowed Centerra Gold Inc. (NYSE:CGAU) to return $65 million to shareholders in the form of share buybacks ($32 million) and dividends ($33 million) during the quarter alone.
Also, in early 2024, the company signed a deal with Royal Gold, a Denver-based precious metal streaming and royalty company, to enhance the operational efficiency of Mount Milligan. Looking ahead, the management has expressed optimism for Q4 2024, expecting all-in-sustaining costs (AISC), or simply ‘total costs,’ to remain low due to reduced CAPEX and increased operational efficiency at Mount Milligan.
The company’s top line is also expected to expand significantly in the coming years as the Thompson Creek mine, which is currently operating at 30% capacity, is expected to reach 100% in 2028. Thus, with strong cash flow, a diversified asset base, and growing demand for gold and critical metals, Centerra is well-positioned to capitalize on high commodity prices in 2025 and beyond.
Overall CGAU ranks 10th on our list of the best gold stocks for inflation. While we acknowledge the potential of CGAU as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CGAU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
