New to investing? 3 gold stocks to consider

Many new, young investors are attracted to the safety of gold as a hedge against inflation. Charles Archer is looking to invest in these three gold stocks instead.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Gold bullion on a chart

Image source: Getty Images.

More and more young people are investing their money, rather than letting inflation erode the value of their savings. Yesterday the Royal Mint released a statement on the burgeoning interest in buying gold amongst young investors. Historically, gold is one of the safest investments, and seen as a worthwhile hedge against inflation. Moreover, the price of gold is near record highs because of fears of the pandemic’s effect on the global economy. Rather than buying physical gold, I prefer to invest in gold stocks. These carry more risk, but if the miners do well, the rewards can be far higher. 

The safest bet

Barrick Gold (NYSE: GOLD) is one of the largest gold miners in the world. It owns a majority share of the Nevada Gold Mines, the largest gold-producing mine in the world. The miner has completely cleared its $13bn of debt since 2013 and has assets of $5.2bn in cash and a $3bn line of credit. The miner has even recommended $750m of surplus cash be returned to shareholders this year. In addition it pays out a small dividend of 1.7%.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

Its share price is now at $20.90, down from a high of $29.75 in September 2020. During the market crash in March last year, Barrick was one of the least affected stocks. 

The main risk to Barrick’s share price is a strong global post-pandemic economic recovery. This miner seems too big to fail, but if worldwide economies improve and inflation risks subside, investors may pull money from gold stocks into more lucrative options. 

More adventurous gold stock

Centamin (LSE: CEY) has experienced a volatile couple of years. In April 2019, the share price was at 80p; in August 2020, it was at 220p. It is currently at 104p. The company operates the Sukari gold mine in Egypt, and expects to generate over 400,000 ounces of gold this year. Centamin is promising a 6.1% dividend return this year, with a dividend policy that heavily favours investors. It has no debt, and $331m in liquid assets that will help it to cope with fluctuations in the gold spot price. It also has big plans to expand African mining operations over the next few years.

The main concerns are the share price volatility, political instability in Egypt, and the risks associated with the development of new mining assets. 

Hope to strike gold

Scotgold Resources (LSE: SGZ) could be a potential goldmine, but comes with significant risk. Its share price fell from a high of 151p in October last year to just 61p today, a reduction of almost two thirds. Buying in at this price point could be attractive.

I think the success of the company depends on the Cononish gold mine in Scotland. CEO Phil Day recently stated that “the potential is huge – that there is gold everywhere.” The company aims to mine 10,000 ounces of gold this year, and more than double production in 2022. It is planning to expand operations across central Scotland over the next decade. I would only invest a small amount as this is a highly speculative stock that depends on the success of one risky mining operation. However, early investors could make big returns on this gold stock if the mine succeeds.

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Charles Archer has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

A beach at sunset where there is an inscription on the sand "Breathe Deeeply".
Investing Articles

Stock market crash: here’s why falling prices is good news

Over in the US, a stock market crash is battering high-priced stocks. But I see falling shares as an opportunity…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

These 5 FTSE 100 shares crashed in 2022. I’d buy 1 today

Although the FTSE 100 index is flat in 2022, some Footsie shares have crashed hard this year. But I see…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How investors can boost their passive income when the FTSE is falling

Stock markets are plagued with fears right now. Here's why I firmly believe those fears improve our passive income prospects.

Read more »

Image of person checking their shares portfolio on mobile phone and computer
Investing Articles

2 cheap UK shares to buy right now!

Recent market volatility means many top stocks now trade at rock-bottom prices. Here are two cheap UK shares I'm thinking…

Read more »

Rolls-Royce's business aviation engine, the Pearl 700
Investing Articles

The Rolls-Royce share price is just pennies. Am I missing something?

As the Rolls-Royce share price lingers in penny stock territory, our writer revisits the investment case that has attracted him…

Read more »

Compass pointing towards 'best price'
Investing Articles

How to put a valuation on the Woodbois share price

The Woodbois share price has fallen from its recent spike, so should I buy now? And how can I work…

Read more »

Inflation in newspapers
Investing Articles

I’d fight inflation with these 2 FTSE 100 dividend shares

With inflation hitting a 9%, I'm boosting my passive income and turning to these two FTSE 100 dividend stocks.

Read more »

New Ways of Investing - Hands Only Using Smart Phone
Investing Articles

2 cheap Footsie stocks to buy for BIG dividends!

The recent stock market sell-off leaves plenty of top stocks looking too cheap to miss. Here are two great Footsie…

Read more »