How to invest in gold stocks in Australia?


  • Among all the options available for investment, gold is still a major crowd puller, maintaining its tag of safe haven effectively.
  • Gold prices gained nearly 8% in May 2021 and reached up to US$1,903/oz before sliding to the current level of US$1,790/oz.
  • Buying gold in the form of coins, bars or jewellery is the most obvious way of investing in gold.
  • Buying gold stocks or investing in gold ETFs is another way of getting exposure to the yellow metal.

Gold is considered a stable investment option. During economic crisis or stock market meltdown, the prices of gold shoot up, providing hedging to the portfolio. Investment in the yellow metal can bring diversification and stability against volatility in the portfolio.

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Options for investment in gold

  1. Physical gold

This is the most obvious method of investment in the precious metal. People can buy gold jewellery, coins or bars from numerous shops and traders at their convenience. Physical gold could be bought even online.

The investment in physical gold provides direct gains in bullion price rise and could be liquidated easily. The biggest disadvantage of holding gold in its physical form is that one has to keep it safe against potential theft or burglary, fire and natural disasters.

  1. Stock market

If someone wishes to take the leverage of gold price rise without holding the yellow metal physically, the stock market is the best place. Investors can put their money in companies that are engaged in gold mining and trading. This way, they get exposure to the overall performance of the gold industry or the mining industry.

To track the price of gold as a commodity or stocks in multiple companies, gold exchange traded funds (ETFs) provide a good alternative. The ETFs could be purchased or sold similar to equities on the bourses.

The performance of gold space players and ETFs is related to the price momentum of the yellow metal.

To know more about trading on the Australian stock exchange, read How do I invest in ASX?

On that note, let us skim through some of the gold players listed on the Australian Securities Exchange (ASX) and their performance over a period of time.  

Data source: ASX, as of 24 June 2021

Newcrest Mining Ltd (ASX:NCM)

Newcrest Mining is the largest gold producer in Australia, with operations in Canada, Papua New Guinea (PNG) and Australia. The company achieved a tremendous feat during the March 2021 quarter when Cadia Gold Mine in New South Wales reported a negative all-in sustaining cost (AISC) of US$160/oz.

NCM is a large-cap gold producer, which pays regular dividend to its shareholders. During the last quarter, the company paid a dividend of AU$0.193 per share.  

Interesting read: Who is the largest gold producer in Australia?

Northern Star Resources Ltd (ASX:NST)

Northern Star exhibits a world-class portfolio of low-cost and high-grade gold projects in Australia and North America. NST is among the top 15 gold mining companies in the world.

The company has given a production guidance of 940-1060 koz of gold for the financial year 2021 at an AISC of AU$1,440-1,540/oz.

NST is a consistent dividend payer. In March this year, the company paid a dividend of AU$0.095 per share. At the current share price of AU$10.03, the dividend yield stands at around 2.81%.  

Also Read: Looking to invest in ASX 200 stocks? Here’s what you should know

OZ Minerals Ltd (ASX:OZL)

Adelaide-based gold and copper miner OZ Minerals has assets in Australia and Brazil. Currently, Prominent Hill is the centre of the company’s mineral production. The mining operation boasts a gold reserve of 3.5Moz and copper reserve of 1.4Mt, as per the mineral resource estimate (MRE) data of 30 June 2020.

Carrapateena and West Musgrave are the other two prominent assets in Australia.

Sandfire Resources Ltd (ASX:SFR)

Sandifire is an aspiring mineral explorer and producer, aiming to become an international diversified and sustainable company. SFR has producing assets in Australia while major exploration and development projects in Botswana and the US.

The DeGrussa Copper Mine is the main producing asset, which produced 9,100 ounces of gold and 16,803 tonnes of copper in the March 2021 quarter.

The company has given a production guidance of 36,000-40,000 ounces of gold and 67-70 kt of copper for FY21.

Interesting Read: Three ASX gold stocks to light up your portfolio as gold prices heat up

Evolution Mining Ltd (ASX:EVN)

Evolution Mining operates gold projects in Australia and Canada. The company made its debut in the Canadian gold market with the Red Lake Project in Ontario.

EVN has provided a production guidance of 670-730koz for FY21 at an AISC guidance of AU$1,240 – AU$1,300 per ounce. In March this year, EVN paid a dividend of AU$0.07 per share with a yield of 3.36%.

Chalice Mining Ltd (ASX:CHN)

Chalice is a diversified mineral explorer with interests in gold, base metals, and platinum group metals. The operations are in the advanced stage of exploration and development.

Chalice acquired the Pyramid Hill Gold Project in 2017. The company has identified several prospects in the project area and undertaking a reconnaissance program.

Read More: 4 Resource-Rich Gold Stocks on ASX

De Grey Mining (ASX:DEG)

The AU$1.6-billion-dollar company recently announced a maiden mineral reserve for its Hemi Discovery. Hemi has a total indicated and inferred mineral resource of 6.8 Moz of Au @ 1.1 g/t.

The company has planned major exploration programs to extend deposits and upgrade inferred resources to the indicated level.

DEG’s ultimate objective is to become a Tier 1 gold producer at Hemi.

Rex Minerals (ASX:RXM)

Rex Minerals is a small-cap gold and copper explorer with assets in South Australia and the Hog Ranch gold property in the US.  

Its Hillside copper-gold development project in South Australia leverages off already existing infrastructure.

Hammer Metals Limited (ASX:HMX)

The junior mining company holds a gold asset in one of the most gold prolific regions- Yandal Greenstone Belt. The Bronzewing South Project is estimated to have an MRE of 24Moz.

Hammer also runs a base metal project in the Mt Isa region. The company has a massive landholding of 2,000 square kilometres in the world’s largest base-metal province.

Predictive Discovery Limited (ASX:PDI)

Predictive Discovery holds greenfield exploration assets in Guinea. The Bankan Project is the most advanced project among others in its asset portfolio. The project sits within the Siguiri Basin, which is host to a number of large gold deposits including AngloGold’s Siguiri Mine.

The company is planning to deliver a maiden resource estimate for its flagship asset in 2021.

Interesting Read: How do I start trading penny stocks in Australia?





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