The Motley Fool

A global recession is coming! I’d buy this safe-haven dividend stock to protect my ISA

Image source: Getty Images

In my opinion, Centamin (LSE: CEY) is a brilliant safe haven for ISA investors to buy in these turbulent times. I’ve spoken at length about how a wide range of macroeconomic and geopolitical landscape problems will likely drive gold prices to fresh landmark highs. They could have a significant effect in pushing precious metals higher too.

Many of these issues have a significant impact on the US in particular and thus threaten to keep the dollar on a downward trend. In this scenario it becomes more cost effective to buy greenback-denominated assets like gold. And it’s a phenomenon that has lifted yellow metal prices in recent days.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

The steep rise in Covid-19 cases in the States; those mass protests and trade fears; and a volatile presidential election process later in the year are likely to keep the dollar under the cosh, to the benefit of bullion prices.

Economic Uncertainty Ahead Sign With Stormy Background

Is gold looking underbought?

So 2020 looks set to be another blockbuster year for gold prices. Why not ride this phenomenon by buying shares in FTSE 250 ‘safe haven’ Centamin?

Gold prices gained almost a fifth during the course of 2019 to finish at $1,515 per ounce. And over the period, Centamin’s stock rocketed 55% in value. Compare that to the slight decline that the broader FTSE 250 recorded in that time.

Evidence shows that investment demand for safe-haven precious metals remains quite strong. According to UBS, total holdings in global gold-backed exchange-traded funds (ETFs) stand at their highest for a year. Yet current ETF net positions of 27.43m ounces stand some way back from the record peaks of 38.56m ounces. Considering that the world economy faces the biggest upheaval since the Great Depression, well it seems that there remains plenty more scope for holdings to rise.

A top safe-haven share

No wonder some analysts are tipping gold to punch through the $3,000 per ounce milestone before long and to fresh all-time highs. It remains just off recent seven-year peaks above $1,760 and looks poised for another run northwards.

But don’t think that gold’s bolt has been shot should it weaken in the near term. The boffins over at UBS say that they “expect price action to remain choppy in the near term,” commenting that “another attempt to break the highs in May and a test of $1,800 is on the cards for gold, but it is quite possible that this happens after another look at the downside first.” Strong dip-buying will help the metal rise again following any weakness, the bank adds.

Getting exposure to gold would seem to be a sterling idea, then. And at current prices Centamin is an attractive way to do this. As well as trading on a low forward P/E ratio of 13 times, it sports a dividend yield north of 5%. This is a safe haven that could help boost your ISA returns in the near term and beyond, I feel.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Royston Wild 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.