Precious metals prices, which had been seriously depressed for a number of years, have been on a bull run since the back end of last year, as fears about global economic growth, compounded by the shock Brexit vote, have increased demand for ‘safe-haven’ assets.

Silver surfer

Shares of FTSE 100 silver miner Fresnillo (LSE: FRES) have gained a whopping 165% so far this year, and edged higher in early trading following a Q2 production update this morning.

The company said silver production was up 14.5% on the same period last year, with gold production up 19.6%. Management has maintained its full-year silver guidance of 49m-51m ounces, but raised gold to 850,000-870,000 ounces from 775,000-790,000.

Analysts expect earnings this year to rocket from 2015’s depressed 4.7p a share to 30.5p, putting Fresnillo on a P/E of 62 at a share price of 1,890p. There’s a prospective 0.7% dividend yield.

The P/E is high even by the typically elevated standards of precious metals miners, but that may not stop the shares making further gains. Silver is currently trading at under $20 an ounce, but was as high as $50 back in 2011. With other flight-to-safety assets, such as cash and gilts, offering negligible or even negative returns in some cases, demand for precious metals could increase.

Golden goose

Randgold Resources (LSE: RRS) is another of this year’s big risers with a 115% gain to date. Of course, this FTSE 100 gold giant has enjoyed the same favourable backdrop as Fresnillo. And with gold at $1,325 an ounce, still well below its $1,900 peak, there’s considerable scope for jittery investors to push the metal price — and Randgold’s shares — higher.

Furthermore, Randgold’s P/E of 37.5, at a current share price of 8,950p, is considerably more attractive than Fresnillo’s. In addition, Randgold was rather more resilient through the metals depression of 2011-15. Its dividend record for these years reads $0.40, $0.50, $0.50, $0.60, $0.66, although the yield is low (a prospective 0.6%) and cash on the balance sheet fell from $488m to $213m over the period. Still, Randgold strikes me as a better-value proposition than Fresnillo at their current share price levels.

Attractive alternative

The shares of H&T Group (LSE: HAT) haven’t performed as spectacularly as those of the precious metals miners, having gained ‘only’ 44% since the start of the year. However, I believe this company is a highly attractive alternative, as its core business can make good money through thick and thin, with periods of increasing gold prices providing windfall profits.

H&T is in the ancient industry of pawnbroking (and associated services) and is valued at a bit over £100m at a current share price of 282p. Despite gold purchasing profits falling as the price of the metal went through its slump, H&T remained so cash-generative that between 2011 and 2015 it was able to reduce net debt from £29m to £2m and pay out £15m in dividends.

The stock trades on a forward P/E of 15 with a prospective 3.2% dividend yield. And with the potential for a perhaps extended period in which the price of gold bumps up profits, I reckon the current valuation makes H&T an attractive buy.

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G A Chester has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.