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 Wheaton Precious Metals Corp. (NYSE:WPM) 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).
A representation of gold bars, highlighting the companies success in their gold industry.
Wheaton Precious Metals Corp. (NYSE:WPM)
Number of Hedge Fund Holders: 25
Dividend Yield: 0.94%
Wheaton Precious Metals Corp. (NYSE:WPM) is a key player in the mining industry and its operations are spread across North America, South America, and Europe. It is involved in the funding of miners in exchange for the right to buy gold, silver, and other metals at a lower price.
During the first nine months of the year 2024, Wheaton Precious Metals Corp. (NYSE:WPM) produced a whopping 450,000 gold equivalent ounces. The third quarter ended September 30, 2024, marked a strong performance, with operating cash flows amounting to $254 million. Revenue also reached $308 million which showed a year-over-year increase of 38%, while net earnings increased by $38 million to $155 million. This exceptional performance of the company was aided by high metal prices and increased streaming volume.
The company is also adding new streaming agreements to its expanding portfolio. In late October 2024, Wheaton Precious Metals Corp. (NYSE:WPM) secured a gold stream worth $625 million on Montage’s Kona project in Côte d’Ivoire. At the same time last year, it also invested $100 million in Rio2’s Phoenix project. Along with these investments, Wheaton finalized a $175 million deal for Allied Gold’s Kurmuk project in Ethiopia in December 2024. This project is expected to produce 240,000 ounces of gold annually for the first five years. Wheaton will receive 6.7% of the payable gold from the stream, which will be reduced to 4.8% once 220,000 ounces of gold are delivered.
Wheaton Precious Metals Corp. (NYSE:WPM) currently holds $694 million in cash and a $2 billion undrawn credit facility which ensures its sustained growth. It also has projected its production to increase by 40%, exceeding 800,000 GEOs annually, by the year 2028. The company has multiple projects in the pipeline that are set to begin production in 2025. Some of these are Blackwater, Goose, Platreef, and Mineral Park. Thus, the company is well on track to gain from the positive momentum of gold and is included in our list of the 11 best gold stocks for inflation.
Overall WPM ranks 7th on our list of the best gold stocks for inflation. While we acknowledge the potential of WPM 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 WPM 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.