Summary

• Gold tends to perform well during economic downturns being the oldest safe haven asset
• World Gold Council has projected the gold demand to revive this year

Gold, which is considered as an investment avenue for diversification, has seen high demand among investors in 2020 because of the uncertainty in the stock markets. The yellow metal was trading at around $1,500 per ounce at the beginning of 2020, while it surged by 25 per cent reaching $1,882 an ounce at the end of the year. According to the World Gold Council, the gold demand is set to revive this year after it touched its lowest last year.

The fact is as it is the oldest safe haven asset, Gold tends to perform well during economic downturns. In the past, investors have considered gold as it as a hedge during political crises, wars, and economic uncertainties. Like between early 2007 and 2011, the gold prices trebled. The current scenario is similar. However, one should not undermine the risks associated with it. High volatility can be experienced by such stocks.

With the pandemic uncertainties around, investors opted for gold instruments like gold-backed exchange-traded funds (ETFs) and similar products (gold ETFs). As per the World Gold Council data, gold ETFs recorded net inflows of 916 tonnes in 2020, which is the highest yearly amount till date.

An investor should focus on both the risks as well as the returns. The potential strategy to avoid losses should be to diversify the portfolio.

(Image Source - © Kalkine Group 2020)

5 Best Gold Stocks in the UK

For gold stocks, we have a plethora of stocks in the UK that are listed on the London Stock Exchange (LSE), ranging from a large-cap FTSE 100 gold miner to small-cap gold explorer. Here’s a list of 5 gold stocks that can be looked for in the year 2021 and beyond.

Altyngold Plc (LON: ALTN)

Altyngold Plc, earlier known as Altyn PLC is a London-based mining company, which is involved in in the production of gold ore.

In the Q3 results for FY 2020, there was a 38 per cent increase in the revenue of the company compared to the previous quarter, resulting from the clawback of accruals and higher gold prices.

A supplementary credit line of KZT 3 billion from Kazakh Bank JSC Bank Center Credit has been awarded to the company for a five-year term at 6 per cent interest rate. The company plans to use this loan to increase processing plant output.

The stock has provided a price return of 18,276.07 per cent in last one year.

Greatland Gold Plc (LON: GGP)

The UK-based gold mineral exploration and mining company has started with early work activities in the Havieron Project in Western Australia last week. The mining lease for which was granted to the company in September 2020.

The Havieron project has been making incredible progress, and various other excellent prospects have been in line. Greatland is looking to acknowledge the large deposits from under explored areas.

The stock has delivered a price return of 793.47 per cent in a period of one year.

Eurasia Mining Plc (LON: EUA)

Eurasia Mining Plc is well-positioned financially, recording revenue of £48,012 for half-year ending 30 June 2020 (30 June 2019: £13,316) and raised US$10 million through Institutional Placing in the six-month period.

The company has developed plans to promote a return on investment for its shareholders, with an aim to increase the profits. Eurasia focus is on achieving its goals of marketable resource projects through self-financed exploration.

The stock has provided a price return of 662.59 per cent in a period of one year.

Thor Mining PLC (LON: THR)

The AIM-listed resource company had sometimes back announced that it had completed the acquisition of the further licence for the areas adjoining the Ragged Range in Western Australia’s Pilbara region. Thor completed a survey of Airborne magnetic in October last year. Widespread gold anomalism has been identified in the historic data review. 

The company has been looking forward to gold assays from field sampling and drill program planning.

The stock has provided a price return of 146.67 per cent in a period of one year.

Petropavlovsk PLC (LON: POG)

In the half-yearly results published by the company for the six months ending 30 June 2020, the total gold produced increased 42 per cent to 320.6koz (H1 2019: 225.0koz). Petropavlovsk estimated the gold production to be between 395koz and 415koz for the financial year 2020.

The stock has provided a price return of 66.86 per cent in a period of one year.