We recently published a list of the 10 Cheap Gold Stocks to Invest In Right Now. In this article, we are going to take a look at where Gold Fields Limited (NYSE:GFI) stands against the other cheap gold stocks to invest in right now.
The Insatiable Demand for Gold Across the Globe
The World Gold Council said in its annual report that the global demand for gold hit a record high in 2024, fueled by investment demand growth and robust central bank purchases. Total gold transactions reached 4,974 tons in 2024, up from 4,899 tons in 2023, including over-the-counter (OTC) investments. Central banks are exhibiting an “insatiable” appetite for gold. The Council said they have attained a significant milestone, maintaining a continuously solid pace of gold purchases. The buying exceeded 1,000 tons for the third consecutive year in 2024.
The National Bank of Poland took the lead as the largest net central bank gold purchaser, adding 90 tons to its reserves. The Central Bank of Turkey added 75 tons, making it the second-largest net purchaser of gold among the world’s central banks. The Reserve Bank of India took the third spot with consistent gold purchases every month, except December. Gold demand in India rose after the government slashed gold import duties, bringing them down to 6% from 15%. In addition, gold investment demand increased across all ASEAN markets in 2024, with Malaysia, Indonesia, Singapore, and Thailand reflecting double-digit year-over-year increases.
CNBC reported that Shaokai Fan, global head of central banks at the World Gold Council, said the following about the situation:
“In 2024, global gold demand surged to a new quarterly high and a record annual total bolstered by heightened geopolitical and economic uncertainties.”
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Are Overall Investments in Gold Increasing?
The annual overall investments in gold are experiencing an increase, rising to 25% and hitting a four-year high of 1,180 tons. This growth was primarily attributed to gold exchange-traded funds. CNBC reported that the demand for gold coins and bars remained firm, boosted by growing demand from India and China. The World Gold Council report said that Chinese investors “faced a dearth of alternative assets in which to invest.” Therefore, the significant factors that supported investors’ inclination toward gold included persistent equity market volatility, domestic economic uncertainty, and record-low government bond yields.
In addition to regional increases in gold investments, OTC investments also remained stable in 2024. OTC transactions occur between two parties directly instead of trading managed by an exchange. The Council said that the demand reflects attempts by individuals with high net worth to hedge economic and geopolitical risks.
The Gold Jewelry Sector and the 2025 Gold Outlook
In contrast to the demand for gold, the jewelry sector showed an opposite scenario in terms of demand. Consumption in the jewelry sector fell 11% year-over-year, primarily pressured by higher prices. The report showed and CNBC reported that this sector was the only outlier, as other sectors gained. According to the Council’s analysts, with consumer spending power pressured by soft economic growth and rising prices, demand for gold jewelry is anticipated to stay weak in 2025. CNBC reported that Louise Street, World Gold Council senior markets analyst, gave the following 2025 outlook for the sector:
“In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates.”
The report also said that overall investment demand is expected to remain healthy in 2025, with anticipated lower interest rates to slash the opportunity costs of holding gold.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of gold stocks with forward P/E less than 15. We then selected the top 10 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Aerial view of a large gold mine in South Africa with many excavators and trucks working.
Gold Fields Limited (NYSE:GFI)
Forward P/E: 13.64
Number of Hedge Fund Holders: 24
Gold Fields Limited (NYSE:GFI) is a globally diversified gold producer with nine operating mines in South Africa, Australia, Chile, Ghana, Peru, and Canada. It engages in underground and surface gold and copper mining. The company is also involved in the exploration, extraction, smelting, and processing of silver. According to CNBC, Gold Fields Limited (NYSE:GFI) has a total attributable annual gold-equivalent production of over 2.30 million ounces (Moz), gold mineral reserves of 44.6 Moz, and gold mineral resources of 30.3 Moz, excluding mineral resources.
Fiscal Q4 2024 was a strong quarter for the company, with attributable equivalent gold production reaching 644koz and reflecting a 26% quarter-over-quarter increase. This strong performance has continued into 2025, with all assets tracking well against their operating plans in January 2025. Strong financial performance and improved operational delivery in H2 2024 allowed Gold Fields Limited (NYSE:GFI) to declare a final dividend of 700 SA cents per share, 67% higher than last year.
On December 2, Gold Fields Limited (NYSE:GFI) entered into a final Implementation Agreement with Torq Resources Inc. for the Santa Cecilia Project. As per the agreement, GFI will invest $48 million to acquire up to 75% of the project’s indirect stake. In a report released on March 3, Josh Wolfson from RBC Capital maintained a Buy rating on the company with a price target of $22.00.
Overall, GFI ranks 7th on our list of the cheap gold stocks to invest in right now. While we acknowledge the potential of GFI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GFI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.