The price of gold is slightly below $2,000 an ounce and flirting with its all-time high of $2,074.88, reached in August 2020 during the depths of the COVID-19 pandemic. Gold has been marching higher in recent weeks following the outbreak of war between Israel and Hamas. The rising Middle East tensions are underpinning the price of gold, which has now gained 6% since Hamas attacked Israel on Oct. 7. Gold is viewed as a safe haven asset and investors tend to flock to it during times of geopolitical uncertainty and market volatility — such as now. Before war broke out in the Middle East, gold had been trading at a seven-month low as higher bond yields exerted downward pressure on the precious metal. But now that trend has reversed. Here are the top three gold and silver stocks to buy for a safe haven investment.
Barrick Gold (GOLD)
Shares of Barrick Gold (NYSE:GOLD) have been on fire lately. In the past month, the gold producer’s share price has gained 12%. Part of the increase is due to investors seeking out the stock as a safe haven following the outbreak of war in the Middle East. However, GOLD stock has also gained on the back of a strong earnings print by the company. Barrick Gold recently announced that its third-quarter profit rose 53% year-over-year to $368 million due largely to higher gold prices.
The gold miner said its profit equaled 21 cents a share, up from 14 cents per share a year ago. Revenue in Q3 totaled $2.86 billion, up 13% from $2.53 billion in the same quarter of 2022. The company’s gold sales in the quarter amounted to 1.03 million ounces, up from 997,000 ounces a year ago, while Barrick’s realized gold price was $1,928 per ounce, up from $1,722 in the previous year. Barrick also mines copper and is benefitting from higher prices for that precious metal too.
Pan American Silver (PAAS)
The price of silver is currently just above $23 an ounce, having increased 10% in the last month. Over the past 12 months, silver prices have risen nearly 20%. One of the companies benefitting from the price increase is Pan American Silver (NYSE:PAAS). The silver miner’s stock is also up 10% over the last 30 days, mirroring the increase in the price of the precious metal. With mining operations primarily based in Latin America, including Mexico, Peru and Argentina, Pan American is a major silver producer.
Pan American Silver recently completed a $4.8 billion acquisition of Yamana Gold in a cash and stock deal. The addition of Yamana boosted Pan American’s production during its most recent quarter by more than 70%. With Yamana in the fold, Pan American now has four additional mines, the Cerro Moro mine in Argentina, El Peón and Minera mines in Chile and Brazil’s Jacobina mining complex. The purchase is already positively impacting Pan American’s earnings. PAAS stock is down 11% year-to-date.
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One of the major U.S. gold producers is Denver, Colorado-based Newmont (NYSE:NEM). In fact, Newmont is today the world’s largest gold miner. The company’s share price has gained nearly 8% in the last month or so but has trailed the sector. NEM stock is down 24% on the year and not far from its 52-week low. That said, the company appears to have long-term growth potential. In the meantime, it pays a quarterly dividend of 40 cents a share, giving it a strong yield of 4.10%.
NEM stock sold off in late summer after the company issued weak second-quarter financial results, with both revenues and profits missing Wall Street forecasts. Revenue declined 12% year-over-year to $2.7 billion due to lower gold volumes. Gold production was down 17% from a year ago due to a union strike at one of its top-producing mines. However, with gold prices trending higher and the labor situation resolved, there is hope that Newmont’s Q3 print will be better and NEM stock will recover.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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