Investing In Gold Stocks In 2019

Gold

It’s been a bumpy ride this year for the gold commodity. Compared to above the $1,300-per-ounce mark at the beginning of the year, the gold price was lately seen struggling to stay above $1,200. While it has been more of a sinusoidal ride, the gold price is again under focus with the global turbulence taking different paths.

Even so, some Australian gold companies have managed to survive with an impressive performance in the equity market. The nation continues to retain its second position as a leading gold producer. The leading gold companies have invested huge sums in major metal extraction projects, undertaking feasibility studies for further discoveries and expand the pit sites by entering into strategic acquisitions and collaborations. 

According to a research study undertaken by Melbourne-based mining consultants Surbiton Associates, the country’s gold companies produced 310 tonnes of gold in financial-year 2018, the highest annual production for two decades.

Below are some of the biggest ASX-listed gold stock performers for the year 2018.

Northern Star Resources (ASX: NST) runs high-quality, world-class gold exploration projects across Western Australia and Alaska. The company’s stock performed decently this year with a YTD return of 44.93%. With the close of the trading hours on December 20, 2018, the shares were at $ 8.590 (up by 4.6% as compared to previous close) with a market capitalization of $5.76 billion.

Saracen Mineral Holdings Limited (ASX: SAR) shares are one of the best gold performers on the Australian share market this year with a gain of 66%. The stock’s excellent performance gain of 3157.34% since listing is also noteworthy.

Evolution Mining (ASX:EVN) has witnessed a strong performance growth of  around 34.72% this year. The shares closed at a price of $3.430, down by 3.9%.

Aurelia Metals (ASX:AMI) shares have demonstrated excellent growth trajectory this year with an impressive YTD return of 142.37% till date.

Overall, Australian material sector has demonstrated decent performance recently as compared to the financial and technology sector. At the close of the trading hours on December 20, 2018, XMJ closed at $10,863.2, down by 3.12%. The benchmark technology sector index – XIJ closed at $ 1,025.7, down by 2.46%. The financial sector index XFJ closed at $5366.9, down by1.06%.

The global economy is facing bleak growth prospects owing to much anticipation around the US stepping into the recession, UK’s uncertain Brexit from EU in March 2019, the slowdown in Chinese consumer demand and sluggish Chinese industrial sector. There are also mounting tensions between the US and China attributable to South China sea war and ongoing trade war.

Even though some volatility is expected in the gold stocks, however gold as a commodity is anticipated to gain popularity by investors amidst global growth concerns. Investors are likely to move towards safer investment opportunities.

In the light of recent robust performance by the Australian material sector in the equity market, the gold stocks are worth keeping a close eye in the near term. Investors may want to prudently cherry pick the gold stocks to earn financial gains.


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