- Traditionally, the yellow metal is seen as a safer investment, especially when the economic conditions are volatile.
- Going by the current economic situation in the UK, investors may turn to gold as a hedge to shield their investments.
With the global economy in crisis due to geopolitical issues, the COVID-19 situation in China, and several other factors, investors are exercising caution with their investments. In the UK, financial markets have witnessed turbulence for quite some time. The markets didn't see a major uptick in performance this year.
In such situations, investors usually opt for haven investments like gold. Traditionally, the yellow metal is seen as a safer investment, especially when the economic conditions are volatile. Inflation in the UK has been at historically high levels while the GDP has been contracting. This means that investors may turn to gold as a hedge to shield their investments.
Image source: © Flynt | Megapixl.com
This perception of safety from investments in gold comes from the fact that during economic headwinds, the currency's value depreciates relative to gold.
The gold future had fallen marginally by 0.04% to US$1,825.35 an ounce at 2:34 am EST. Meanwhile, GBP to USD currency rates were at 1.2037, down by 0.12% simultaneously.
Let us explore some FTSE gold stocks that investors may consider.
Pan African Resources Plc (LON: PAF)
Pan African Resources is a gold producer and belongs to the FTSE AIM UK 50 Index. It holds a market cap of £367.66 million and has an EPS of 0.04 as of 30 December 2022. Over the past year, the stock price has decreased by 7.83%. The share price of Pan African Resources stood at GBX 16.54 as of 9:47 am GMT on Friday.
Endeavour Mining Plc (LON: EDV)
The multinational firm owns and operates several gold mines in African countries. The firm belongs to the blue-chip FTSE 100 index with a market cap of £4,351.06 million. EDV's earnings per share stood at 0.90 as of 30 December 2022. The stock has given a return of 9.91% to investors over the past 12 months and was trading at GBX 1,753.00, down 0.90% as of 9:52 am GMT on Friday.
Centamin Plc (LON: CEY)
The gold mining company focuses on the Arabian-Nubian Shield and is listed on the London Stock Exchange on the FTSE 250 index. The mid-cap firm enjoys a market cap of £1,312.57 million, while its EPS stood at 0.09 as of 30 December 2022. The stock's one-year return stands at 29.97%, traded at GBX 113.65, up 0.13% as of 9:57 am GMT on Friday.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.