10 Gold Stocks to Watch in September 2017, Plus the One to Own

This list shows the top-performing gold stocks this month, which we'll be watching in September 2017. While these stocks posted gains in August, we still aren't recommending them. Instead, we're going to show you Money Morning Resource Specialist Peter Krauth's pick for the best gold stock to buy this year...

Top Gold Stock Share Price August 2017 Gain
Sibanye Gold Ltd. (NYSE ADR: SBGL) $6.35 +22.9%
Iamgold Corp. (NYSE: IAG) $6.49 +20%
Alamos Gold Inc. (NYSE: AGI) $8.17 +15.1%
Franco Nevada Corp. (NYSE: FNV) $81.20 +11.6%
Hudbay Minerals Inc. (NYSE: HBM) $8.70 +11.5%
Gold Fields Ltd. (NYSE ADR: GFI) $4.42 +10.9%
Randgold Resources Ltd. (Nasdaq ADR: GOLD) $101.90 +9.6%
Harmony Gold Mining Co. (NYSE ADR: HMY) $1.97 +8.8%
Agnico Eagle Mines Ltd. (NYSE: AEM) $50.60 +8.4%
Yamana Gold Inc. (NYSE: AUY) $2.81 +7.9%

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Six of the 10 top gold stocks listed above have posted double-digit returns this month. The primary reason behind the rally has been a strong rebound in the gold price, which is up 3.9% from $1,267 on July 30 to $1,317 today (Friday, Aug. 31).

Prices have rallied mainly due to increasing threats between North Korea and the U.S.-Japan alliance, which led to North Korea launching a missile that flew over Japanese territory on Monday. This sent gold prices to an 11-month high of $1,319 on Tuesday.

3 Catalysts for Gold Prices in 2017

Monday's test was considered the most serious of North Korea's 18 missile tests so far this year - serious enough to panic investors into buying more gold than usual...

Throughout the 11 missile tests since April 4, the price of gold has only seen an average gain of 0.1% the day after each test. But on Tuesday, gold climbed 1.1%. International crises tend to boost gold demand because investors buy it as a hedge against panicked stock market sell-offs. The Dow Jones opened 0.6% lower on Tuesday morning following the missile test.

Another factor fueling gold's August rally is the plunging U.S. dollar. Since gold is priced in dollars, a weaker dollar lets people using other currencies buy more of the metal, increasing demand. On Aug. 28, the U.S. Dollar Index (DXY) - which measures the dollar against other prominent currencies like the euro and yen - fell to its lowest level since January 2015.

And the dollar might not strengthen anytime soon. U.S. President Donald Trump seems intent on keeping it lower for longer, since he's repeatedly told the media he likes low interest rates and a lower dollar.

"Frankly, other than the fact that it sounds good, lots of bad things happen with a strong dollar," Trump told The Wall Street Journal on July 25. Since that date, the DXY is down 1.2%, from 94.05 to 92.95.

But Peter says a weak greenback could be bullish for today's gold stock pick...

gold stocks

This firm is in the gold royalty/streaming sector, an industry that makes deals with gold miners to buy gold at a fixed price. These agreements give royalty and streaming companies - like today's pick - the upper hand because they're able to buy gold at a discount. And when gold prices rise, these companies profit by reselling the gold at a higher price.

Since gold prices usually rise from a weaker dollar, this puts these companies at an economic advantage over gold miners. Miners make contracts with streamers to hedge against gold prices falling. But if gold prices rise, streamers will profit from the higher gold price while miners are locked into their contract.

Peter also considers this company a strong income stock, which makes it an even better investment if you're saving for retirement. The company offers a quarterly dividend of $0.04 per share (1.14% yield). While that may not seem like much, it's above the average 0.75% yield of the entire gold industry.

"This company could be exactly what U.S. retirees are looking for to safeguard against the dangerous rising tide of inflation," Peter said on Aug. 23.

Here's his pick...

The Best Gold Stock to Buy for Passive Income from the Falling Dollar

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Peter recommends Osisko Gold Royalties Ltd. (NYSE: OR) as a top income stock to buy in the gold sector.

Osisko is a Canadian royalties and streaming company with stakes in several large North American mines. It has a 5% net smelter return (NSR) royalty - the gross revenue from a mining operation, minus transportation, refining, and insurance fees - on the Canadian Malartic. Located in Quebec, Canada, the Malartic is the largest gold mine in the country, and it's expected to make up as much as 68.3% of Osisko's total royalties this year.

Beyond just gold mines, Osisko also owns several other publicly traded metals and mining companies. These include a 33.4% stake in Barkerville Gold Mines Ltd. (CVE: BGM) and a 15.7% stake in Osisko Mining Corp. (TSE: OSK).

Peter likes OR stock because it boasts solid fundamentals. The firm has a forward price-to-earnings (P/E) ratio of just 10.3 - sharply lower than the current P/E ratio of 46.18.

A lower forward P/E ratio means analysts forecast Osisko's earnings to rise significantly. Analysts surveyed by FT say Osisko's annual EPS could rise as much as 42.4%, from $0.33 in 2016 to $0.47 this year. Those same analysts give Osisko stock a one-year high price target of $22 - up 57.8% from $13.94 today.

But the big bonuses for OR investors - especially retirees looking for passive income - are its strong dividend yield of 1.14% and quarterly dividend of $0.07 per share. The yield bests the average gold industry yield of 0.75%, making OR one of the best gold dividend stocks to invest in this year.

The Bottom Line: The 3.9% rise in gold prices this month has provided a boost to the top 10 gold stocks listed above. And both gold prices and gold stocks have seen a lift from North Korea and the dollar, the latter of which may continue lower this year. Peter says Osisko stock is a great way to make passive income from the dollar's decline. As a royalties and streaming company, Osisko is able to buy gold from producers at a low price even if prices move higher from the falling dollar. This allows it to make a profit when it sells it back to the market. That - plus OR stock's above-average dividend - make it one of the best gold stocks to own in 2017.

Up Next: Rare Gold Anomaly

Money Morning Executive Editor Bill Patalon just caught something on his gold charts that he's only seen twice in the past 20 years. A $13 billion gold anomaly he calls the "Halley's Comet of investing." It's very rare, and fleeting, and Bill sees things lining up perfectly to bring some very sizable precious metal profits to well-positioned investors. Click here to check out his research...

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