CMCL, PAF, EDV: Are these gold stocks good bets amid recession fears?

Highlights

• As per a Reuters report released today, the prices of gold have increased by over 1%, motivated by a pullback in the dollar.
• As inflation levels have been hitting the roof and the UK economy is showing signs of a slowdown, analysts say that the economy may be headed towards a recession. 

Gold is considered a safe investment amid geopolitical crises or economic slowdown. But the prices of gold are usually volatile amid economic downturns. As per a Reuters report released on 29 April, the prices of gold have increased by over 1%, motivated by a pullback in the dollar. This came despite the fears of interest rate hikes by the Fed creating the expectation of a monthly decline in bullion prices.

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According to another recent Reuters report, the Bank of England (BoE) is also set to raise the rate from 0.75% to 1% on 5 May. BoE has also been raising the interest rates to counter the impact of inflation, but not as aggressively as the Fed. As inflation levels have been hitting the roof and the UK economy is showing signs of a slowdown, analysts say that the economy may be headed towards a recession. 

Amid the fears of recession, the UK investors are looking for investment options which would provide them with good returns. Even though gold prices have been fluctuating lately due to market instability, gold stocks are on the radar of investors as gold mining firms have the capability to grow more than the price of the yellow metal.

However, not all gold stocks may gain with rising gold prices, and therefore, it is crucial for investors to cautiously evaluate the gold companies before investing their hard-earned money in them.

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Here are 3 gold stocks that investors may consider in the current turmoil.

1. Pan African Resources plc (LON: PAF)

The shares of Africa-centered gold producer, Pan African Resources plc, were down by 0.45% at around 11:30 AM (GMT+1) on 29 April 2022, at GBX 22.15. The FTSE AIM UK 50 Index constituent has performed well lately, and it has offered its shareholders a return of 25.14% over the last one year as of 29 April 2022, while its return on a year-to-date basis stands at 32.63%. The current market cap of the company stands at £495.26 million.

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2. Caledonia Mining Corporation plc (LON: CMCL)

The shares of the gold ore mining business, Caledonia Mining Corporation plc, up by 0.44% at around 11:30 AM (GMT+1) on 29 April 2022, at GBX 1,150.00. The AIM constituent has given its shareholders a return of 5.26% over the last one year as of 29 April 2022, while its return on a year-to-date basis stands at 25.98%. The current market cap of the company stands at £146.96 million.

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3. Endeavour Mining plc (LON: EDV)

The shares of the globally operating gold mining group, Endeavour Mining plc, were up by 1.97% at around 11: 30 AM (GMT+1) on 29 April 2022, at GBX 1,969.00. The FTSE 100 constituent started trading on the LSE last year in June and has performed well lately, with its year-to-date return standing at 17.78% as of 29 April 2022. The current market cap of the company stands at £4,798.34 million.