3 Best Ways to Invest in Gold
With 2017 fast approaching, investors could be asking how to invest in gold in the New Year. To say the least, the best way to invest in gold would be to pay attention to gold mining companies.
You see, if gold prices increase in 2017, gold mining companies could provide massive returns. Mining companies did this in 2016 as well.
Consider this, in the first two quarters of 2016, gold prices had a solid run; the yellow precious metal increased about 25%. However, there were mining companies that more than doubled on this move.
Below, I have identified three mining companies that could make investing in gold lucrative. These companies have low costs of production, properties in safe geological areas, and a solid cash position at hand.
Before going into any details, note that the following three stocks are not recommendations; rather, they are examples of what investors should look for when trying to invest in gold.
1. Richmont Mines Inc. (NYSEMKT:RIC)
Richmont Mines Inc. (NYSEMKT:RIC) could be one of the best choices for investors looking to invest in gold. It’s a leading gold producer with properties in North America.
In the first nine months of 2016, Richmont Mines produced an ounce of gold at average all-in sustaining costs of $980.00. In the same period a year ago, these costs were $1,024. This represents a decline of over four percent. (Source: “Richmont Mines Reports Third Quarter Financial Results; Pivotal Quarter Positions Island Gold for Growth,” Richmont Mines Inc., November 10, 2016.)
Mind you, Richmont Mines’ costs have been relatively high, and this is mainly due to required downtime at its key mine. The company seems optimistic going forward about its costs and its gold production.
At the end of the third quarter, the company had $60.1 million in cash. This amounts to roughly $0.95 per share.
2. Barrick Gold Corporation (NYSE:ABX)
If you are familiar with the gold mining sector at all, chances are you have heard of Barrick Gold Corporation (NYSE:ABX). It is one of the biggest gold miners, with a very low production cost and a solid balance sheet.
In the first nine months of 2016, the company produced an ounce of gold at all-in sustaining costs of $730.00. In the same period a year ago, these costs were $866.00 per ounce. So, year-over-year, Barrick Gold’s production costs declined by close to 16%. (Source: “Barrick Reports Third Quarter 2016 Results,” Barrick Gold Corporation, October 26, 2016.)
As for cash, Barrick Gold had cash and cash equivalents of $2.65 billion at the end of the third quarter. This amounts to a little more than $2.25 per share.
This company could provide huge leverage to investors looking to invest in gold.
3. Agnico Eagle Mines Ltd (NYSE:AEM)
Agnico Eagle Mines Ltd (NYSE:AEM) is another major gold producer that is worth looking at if one is looking to invest in gold.
In the first nine month of 2016, the company produced an ounce of gold at an all-in sustaining cost of $890.00. The cost of production at the company has increased a little, but remains one of the lowest costs in the mining sector. (Source: “Agnico Eagle Reports Third Quarter 2016 Results,” Agnico Eagle Mines Ltd, October 26, 2016.)
Looking at its cash position, Agnico Eagle ended the third quarter with cash and cash equivalents of $618.56 million. This amounts to about $2.78 per share.