Want to play soaring gold prices? These stocks are seen rising by at least 20%
Investors are flocking to so-called safe havens such as gold amid higher-for-longer inflation and rising risks of a recession, while turmoil in the banking sector has furthered strengthened gold’s appeal. Gold prices are up about 10% this year and traded around $2,020 an ounce at one point on Thursday. That’s within striking distance of the $2,075 peak hit in Aug. 2020 , during the early days of the Covid-19 crisis. And some market pros think gold has further to go. Hedge fund manager David Neuhauser thinks prices could potentially even hit $3,000 in the next couple of years, depending on which recessionary scenario — if any — comes to fruition. “Do we see a deeper protracted recession, or do we skirt it and just touch the bottom in terms of a very shallow type of move?” Neuhauser, chief investment officer at Livermore Partners, said Thursday. “That will … [determine] whether gold sees $2,200 or $2,300 potentially in the next several months, or if there’s a larger, more pronounced effect on gold, where potentially you could even see over the next year or two, somewhere close to $3,000 an ounce,” he told CNBC’s “Street Signs Asia.” For investors looking to cash on potentially higher gold prices, CNBC Pro screened FactSet for stocks in the Global X Gold Explorers ETF , the iShares MSCI Global Gold Miners ETF , the VanEck Gold Miners ETF , and the SPDR S & P Metals and Mining ETF . The following stocks are buy-rated by over 50% of analysts that cover them, and have average upside of at least 20%: Canada’s NovaGold Resources has the highest potential upside at 40.4%. The stock is rated buy by more than 66% of analysts covering it. Mineral resource firm Karora Resources made the screen too, with analysts giving the stock average upside of 37.1%. The company’s gold mining operations are in Western Australia, where it aims to produce 185,000 to 205,000 ounces of gold annually by 2024. Analysts give British mining firm Hochschild Mining potential upside of 32.8%, according to FactSet data. The company operates three mines and had a production target of 360,000 to 375,000 ounces of gold for 2022. Other stocks that made the screen include Australia’s Silver Lake Resources , Indonesia’s PT Merdeka Copper Gold, Endeavour Mining and B2Gold . How Neuhauser is playing it Neuhauser from Livermore — which specializes in energy, industrials, and financials — believes gold is now “the best” asset class to own against a backdrop of market tailwinds such as lower yields, a weaker U.S. dollar and geopolitical tensions. “Year to date, our hedge fund has exposure of well over 20% through specific small cap miners that we feel have tremendous leverage over the next several years to the metal,” he said. The fund also owns assets tied to physical gold. — CNBC’s Michael Bloom contributed to reporting
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