Gold is by far one of the best-performing asset classes of 2016, and our four gold stocks to buy are crushing the markets.
Three of these gold stocks have already climbed more than 100% in 2016. One of them is up almost 200% year to date.
But before we get into our favorite gold stocks to buy, here's what has been driving gold prices in 2016 and why they have room to keep climbing...
Gold prices enjoyed a stellar start to the year thanks to volatile stock markets, worries of a slowdown in China, and the increasing use of negative rates from global central banks. Gold ended Q1 2016 with a 16.1% gain. That was gold's best quarterly advance since 1986.
The gold price rally continued in Q2 when it became clear the U.S. Federal Reserve had become hesitant on raising interest rates again in 2016.
Over the last several weeks, the fears of a Brexit pushed gold prices and gold stocks even higher. Safe-haven gold spiked more than $68 intraday to a 27-month high on June 24.
And the market's sharp reaction to Brexit has made Fed interest rate hikes in 2016 even more unlikely.
A rate hike at this month's FOMC meeting is now completely off the table. In fact, any interest rate boost from U.S. policymakers looks extremely unlikely this year and next. Traders and investors are actually starting to price in the likelihood that the Fed will trim rates this year rather than raise them. According to CME Group's FedWatch, they place the odds of a rate hike before 2018 at 50%. A full rate hike isn't expected until the final quarter of 2018.
That's led to more gains for gold prices this week. In morning trading today (Friday), spot gold was up $15.80, or 1.2%, at $1,338.50. That puts gold's year-to-date gain at 25.5%.
Precious metal investors and traders are betting global central banks will step in with stimulus measures to limit the implications of Brexit. The Eurozone, which has already has ventured into negative interest rate territory, is expected to step up its bond purchase program.
As a result, a number of analysts have upped their year-end gold price targets. And that's just another bullish sign for our four favorite gold stocks in 2016.
Money Morning Resource Investing Specialist Peter Krauth said earlier in 2016 that gold miners have become the new stock market leaders. As gold's bull run becomes more deeply rooted, gold producers will be the first in line to boast the biggest gains.
Krauth was spot on. Plenty of gold mining stocks have logged triple-digit year-to-date gains. Years of cost-cutting and debt reduction when gold prices were low positioned mining companies for this year's bull run.
The following four best gold stocks to buy now are all engaged in precious metal mining. And they all have tremendous upside for the rest of 2016...
These 4 Gold Stocks Will Continue Crushing Markets
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Best Gold Stocks No. 4: Goldcorp Inc. (NYSE: GG) acquires, explores, develops, and operates properties in throughout North and South America. Founded in 1954, the company is headquartered in Vancouver, Canada. A number of analysts are bullish on Goldcorp because of its strong growth profile, dividend, strong balance sheet, and long mine life on average. Over the last several years, Goldcorp has cut spending, altered mines, and focused on its most profitable production. GG trades at $19.71 and is up 70.67% year to date.
Best Gold Stocks No. 3: Newmont Mining Corp. (NYSE: NEM) develops and produces gold, silver, and copper in the United States, Australia, Peru, Indonesia, Ghana, and Suriname. The company was founded in 1916 and is headquartered in Greenwood Village, Colorado. After a recent asset sale, Newmont has been focusing on its highest-quality mines. An Indonesian consortium is said to be mulling a $2 billion bid for Newmont's assets in the country. NEM was the second best-performing stock on the S&P 500 as of June 9. NEM was trading at $30.51 when it first made our list of gold stocks to buy. At $39.97, NEM shares are now up 121.90% year to date.
Best Gold Stocks No. 2: AngloGold Ashanti Ltd. (NYSE ADR: AU) is a gold mining and exploration company. The company has 17 mines globally. The company's strengths are apparent in several areas, including its impressive record of EPS growth and increased net income. RBC Capital Markets has an "Outperform" rating on the stock. The firm believes AU represents the most robust opportunity in its South African coverage, supported by a diverse, low-cost asset portfolio. AU was changing hands at $15.50 when we first highlighted the best gold stocks to buy. At today's $18.96, AU is up 166.90% year to date.
Best Gold Stocks No. 1: Barrick Gold Corp. USA (NYSE: ABX) is a Toronto, Canada-headquartered company that mines both gold and copper. During gold's slump in previous years, the company sharpened its focus on reducing its debt. Forward-looking execution of project developments could be key for Barrick and lead to further upside for its shares. Barrick, the world's largest gold producer, is a top holding among several hedge funds. On May 16, updated 13-F filings revealed the Soros Fund's new positions include 19.4 million ABX shares. ABX closed out Q1 with an 84% gain. When we listed ABX among the best gold stocks to buy some three months ago, shares were trading at $16.14. At $22.08, ABX is up 198.92% year to date.
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