Best Gold Stocks that Could be a Strategic Asset

Team Veye | 04-Apr-2024

Gold investing has again come to the centerstage when its prices started hitting a record high every week. Gold Prices, which had remained largely stable between April and December 2023, have been inching higher almost every other day lately. 

Buoyed by a weaker US dollar, investors have maintained their focus on US inflation data, which could influence the timing of the Federal Reserve’s first interest rate cut this year.

The March 2024 CPI data is scheduled to be released on April 10, 2024. As it is, the earlier data released on 29 February had reported US Inflation Rate at 3.15% as compared to 3.09% previous month and 6.04% last year. This being lower than the long term average of 3.28%.

The Fed had indicated that it expected to reduce interest by three-quarters of a percentage point by 2024 end, despite inflation being high currently. 

The current escalation in gold prices could be mainly on account of investors viewing gold as a hedge against inflation. The geopolitical uncertainty in both Ukraine and the Middle East (Gaza) along with the consideration that gold could be a strategic Long Term Investment, crucial for a well-diversified portfolio adds to its glamour. Gold is also being favourably viewed as a reserve at central banks.

In the Current Scenario, Our Three Best Picks in Gold Companies are:-

West African Resources Limited (ASX: WAF)

West African Resources Limited in its Annual Report for the year ended 31 December 2023, released on 14 March 2024, revealing notable achievements across various fronts.

Impressively, cash flow from operating activities reached $208.6 million, while revenue stood at $661.2 million, reflecting a robust Financial Performance. Profit before tax amounted to $241.1 million, with a profit after tax of $164.8 million, indicating strong profitability. The company concluded the year with a substantial cash position of $135 million and $10 million in unsold gold bullion.

Perseus Mining Limited (ASX: PRU)

Perseus Mining Limited’s gold production in the first half of the year amounted to 261,577 ounces at an All-In Site Cost (AISC) of US$979 per ounce. 

The extraordinary cash position of US$581 million provides a robust and highly liquid foundation, enabling the company to fund investments.

PRU exhibits a strong and consistent financial performance, with year-on-year returns showing significant growth. Strong operating fundamentals are evident in the company's ability to maintain low operating and production costs. The company boasts a robust pipeline of both organic and inorganic growth and expansion opportunities, both in the short term and in the long term. 

Resolute Mining Limited (ASX: RSG)

Resolute Mining Limited experienced a notable financial resurgence in the initial half of Fiscal Year 2023, evidenced by a substantial profit of $129 million, a stark contrast to the consistent and considerable losses incurred in preceding years. 

The company commands a robust gold production capability, predominantly emanating from the Syama Gold Mine, which contributes approximately 200koz out of the total 350koz produced, with the remaining 100-150koz sourced from the Mako Gold Mine. These projects not only demonstrate a strong existing capacity for generating monetary returns but also exhibit significant potential for future expansion.


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