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Gold has proven to be a smart investment overall this year, with the price of the precious metal rising steadily since the start of 2024. Not only has gold’s price hit several price milestones so far this year, but it has also demonstrated significant growth in value. For example, on January 1, gold was priced at $2,063.73 per ounce. Today, that price is sitting at an impressive $2,519.38 per ounce.
That represents a gain of about $455 per ounce — or an uptick of approximately 22% — in less than a year. But gold is typically considered a long-term investment, so this type of quick, substantial growth in a relatively short period is unusual. That has led to more attention from investors and reaffirmed gold’s status as a reliable store of value and a hedge against economic uncertainty.
While physical gold tends to be the go-to for many investors seeking to capitalize on the metal’s rising value, there are other gold-related assets that warrant consideration, with gold stocks, in particular, presenting an intriguing opportunity for investors right now. These securities, which represent ownership in companies involved in gold mining, exploration, or production, offer a unique way to gain exposure to the gold market — and investing in them could pay off this fall.
Ready to get started? Learn more about your gold investing options here.
Why investing in gold stocks could pay off this fall
There are a few reasons why gold stocks could be a good bet right now, including:
Ongoing economic uncertainty
This fall, global economic uncertainties continue to loom large. Ongoing geopolitical tensions, inflation concerns, and the high likelihood of interest rate adjustments by the Federal Reserve are helping to create an environment of financial instability, and historically, such conditions have driven investors toward safe-haven assets like gold.
Gold stocks often amplify the movements in gold prices, making them an attractive investment during uncertain economic times. The potential for increased profitability in gold mining companies when gold prices rise can lead to higher stock prices, providing investors with the opportunity for enhanced returns.
Additionally, diversifying a portfolio with gold stocks can help mitigate market volatility, allowing investors to have a stable performance even in turbulent market conditions.
Find out more about how gold investing could benefit your portfolio now.
Technological advancements in mining
The technological advancements in the gold mining industry, such as automation and artificial intelligence, are expected to result in increased profitability for mining companies. This technological revolution is likely to lead to improved operational efficiencies and reduced costs, potentially translating into higher profit margins for well-positioned mining companies.
Investing in gold stocks of companies at the forefront of this technological revolution could result in significant gains this fall. Companies adopting sustainable and efficient mining practices are likely to attract more investment, possibly driving up their stock prices and benefiting investors.
The potential for higher dividends
The improved cash flows of many mining companies due to rising gold prices have allowed for increased dividend payments to shareholders. This trend of growing dividends may continue if gold prices remain strong, making gold stocks with attractive dividend offerings appealing to income-focused investors this fall.
Gold stocks offering attractive dividends can provide investors with a combination of capital appreciation as gold prices rise and a steady income stream through dividend payments, especially in a low-interest-rate environment where traditional fixed-income investments may offer lower yields.
Increased merger and acquisition activity
The gold mining sector has experienced increased merger and acquisition (M&A) activity in recent years, a trend that is expected to continue into the fall. Investing in gold stocks this fall could potentially pay off through premium payouts resulting from companies becoming acquisition targets or strategic mergers leading to enhanced profitability.
Keeping an eye on junior mining companies with promising exploration results or reserves could present attractive opportunities for larger firms looking to expand their asset base through acquisitions.
The bottom line
While investing in gold stocks carries risks and requires careful consideration, it offers significant benefits this fall. From potential amplified returns in a rising gold price environment to the advantages of technological advancements and M&A activity, gold stocks present compelling opportunities for investors seeking to capitalize on the precious metal’s ongoing bull run. Before investing, thorough research and an assessment of risk tolerance are essential to ensure alignment with investment goals and portfolio needs.
