Investors have been looking for the best gold mining company to invest in now that the metal has climbed this year and is now trading at $1,249.80 per ounce.
For comparison, that beats the Dow Jones' gain of 5.9% over the same period.
And Money Morning Resource Specialist Peter Krauth forecasts a year-end price of $1,400 for gold. If the metal hits that target, investors who buy in now would see a 12% return in just over seven months.
But we've found a better way to leverage gold's rally for a much bigger profit. We specifically recommend investing in one particular gold mining company whose stock could offer a huge return as high as 61.2% over the next year.
Before we give you our pick, here's why we're bullish on the gold price in 2017...
Why Gold Prices Will Rally This Year
Some investors interested in gold believe in the myth that the price of gold can't rise when interest rates are rising.
After rates were hiked to the 0.75%-1% range in mid-March, U.S. Federal Reserve Chair Janet Yellen said three more interest rate increases could happen this year. She even hinted at several more rate hikes in 2018. Climbing interest rates often boost the U.S. dollar, which drags gold prices lower since the metal is priced in dollars and becomes more expensive to users of other currencies when the dollar rises in value.
But Krauth believes that contrary to popular belief, periods of rising interest rates don't hurt gold prices. In fact, over the long term, high interest rates have often correlated with a higher gold price. All you have to do is look at the 1970s for proof...
For most of the decade, the federal funds rate - which is the benchmark U.S. interest rate - stood at over 5%. That's much higher than the current range of 0.75%-1%. It reached 15% by 1979, which was one of the highest levels in history.
Despite rates hitting those record levels, gold prices managed to rally throughout the decade. From January 1970 to January 1980, the metal skyrocketed from $34.83 per ounce to $500 (unadjusted for inflation).
We appear to be entering a similar era of both climbing interest rates and rallying gold prices. There have been three rate hikes since Dec. 15, 2015. Over that period, the price of gold has gained 17.7% to its current $1,249.80 price.
Krauth believes those gains will continue over the long term, and gold mining stocks stand to benefit the most from rising gold prices. After all, miners make more money when prices rise because their profit margins grow bigger for each ounce of gold they produce.
That said, let's talk about the best gold mining stock to buy in 2017, which could hand you a 61.2% profit in just 12 months...
The Best Gold Mining Company to Invest In for a 61.2% Return by Next April
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The best gold stock to buy this year is Goldcorp Inc. (NYSE: GG).
Goldcorp is a Canadian gold miner that continues to be one of the world's top producers of the precious metal. It also boasts some exciting prospects that make it one of the best investments in the gold sector.
The first reason that Goldcorp is a stellar investment is the company's rapid growth. In fact, it's announced plans to boost production by as much as 20% through 2022, which will help grow the company's bottom line as the gold price increases.
From the stock's high price of $17.67 on Feb. 16, GG has declined 22.8% to $13.65, which most experts see as a minor price correction. In reality, this could be one of the best buying opportunities of the year for a gold stock set to soar 61.2% from its current price to $22 by April 2018.
The only reason the stock has cratered is because the company just spent some of its capital on two major projects that will lead to long-term gains for Goldcorp...
One project is the firm's partnership with Barrick Gold Corp. (NYSE: ABX) in the Cerro Casale mine in Chile. This is widely considered one of the largest and most lucrative gold mines in the world.
The partnership not only gives Goldcorp a 50% stake in the mine, but also partners Goldcorp with the largest and most efficient gold mining company in the world. While Goldcorp boasts a low all-in sustaining cost (AISC) of just $812, Barrick's AISC of $760 is the absolute lowest in the industry. That means it only costs Barrick $760 in operating costs for every ounce of gold it mines from the ground.
Sharing methods to make gold mining more cost-efficient can only benefit Goldcorp and its profit margins going forward. That's why we expect GG stock to provide a 61.2% return to investors over the next year as it rises to $22 a share.
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