Written by Rebecca Lipman

Did you know India accounts for 32% of the global gold market, and half of that is just for jewelry bought for weddings.

A member of the World Gold Council in India said, "Demand for gold out of India is fundamental for the health of the industry. If India sneezes, the gold industry will catch a cold."

Indeed, India is one of the fastest growing economies on Earth and the largest consumer of gold. The metal is considered not only a means of wearable wealth, financial security and status, but is also considered sacred. A family that doesn't own gold is considered an "incomplete family.

60 Minutes reports the number of rich and middle-class Indians now outnumber the poor. On average, Indian families also save about 30% of household income, compared to America's saving rate of 5%. This increase in status and savings enables Indians to buy more gold.

Indians consider gold more of an investment than an expense. With the gold continually rising in price (and Indians do not necessarily believe prices will go down again) Indians are rushing to stores to purchase as much as their income affords.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.



Business Section: Investing Ideas
"No gold, no wedding" is a common catchphrase in India. As the country's middle and upper class populations grow, more gold is likely to be bought to show off the wealth, both during wedding ceremonies and in day-to-day activities.

The more gold demand, the higher gold prices. This is all good news for gold miners.

With that in mind we created a list of gold stocks with market caps over $300 million and net positive institutional purchases in the current quarter.

Institutional investors, such as hedge funds, think these gold stocks have more value to price in. Do you agree? (Click here to access free, interactive tools to analyze these ideas.)

1. Yamana Gold, Inc. (NYSE:AUY): Engages in gold and other precious metals mining, and related activities, including exploration, extraction, processing, and reclamation. Net institutional purchases in the current quarter at 32.8M shares, which represents about 4.42% of the company's float of 742.82M shares.

2. NovaGold Resources Inc. (NYSE:NG): Engages in the exploration and development of mineral properties primarily in North America. Net institutional purchases in the current quarter at 11.1M shares, which represents about 6.69% of the company's float of 165.88M shares.

3. Central GoldTrust (NYSE:GTU): Central Gold-Trust primarily invests in unencumbered gold bullion. Net institutional purchases in the current quarter at 1.2M shares, which represents about 7.21% of the company's float of 16.64M shares.

4. Aurizon Mines Ltd. (NYSE:AZK): Engages in the acquisition, exploration, development, and operation of gold properties in North America. Net institutional purchases in the current quarter at 8.6M shares, which represents about 5.33% of the company's float of 161.39M shares.

5. Lake Shore Gold Corp Ordinary S (NYSE:LSG): Engages in the acquisition, exploration, and development of gold properties in northern Ontario and Quebec of Canada, as well as in Mexico. Net institutional purchases in the current quarter at 113.3M shares, which represents about 30.07% of the company's float of 376.75M shares.

6. Jaguar Mining Inc. (NYSE:JAG): Engages in the production of gold, as well as in the acquisition, exploration, development, and operation of gold mineral properties in Brazil. Net institutional purchases in the current quarter at 7.7M shares, which represents about 11.79% of the company's float of 65.33M shares.

7. International Tower Hill Mines Ltd. (NYSE:THM): Engages in the acquisition, exploration, and development of mineral properties in Alaska and Nevada. Net institutional purchases in the current quarter at 4.5M shares, which represents about 6.54% of the company's float of 68.80M shares.

8. Richmont Mines Inc. (NYSE:RIC): Engages in the acquisition, exploration, development, and operation of mining properties, principally gold in northeast Canada. Net institutional purchases in the current quarter at 2.0M shares, which represents about 6.92% of the company's float of 28.89M shares.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Rebecca Lipman does not own any shares of the companies mentioned above. Institutional data sourced from Fidelity.

Related Articles
  1. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  2. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  3. Stock Analysis

    The Top 5 Small Cap Gold Stocks for 2016 (KGC, SBGL)

    Learn about the factors that led to gold's underperformance, factors that may lead a gold rally and five micro-cap gold stocks to consider.
  4. Fundamental Analysis

    Performance Review: Commodities in 2015

    Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year.
  5. Stock Analysis

    The Top 5 Micro-Cap Gold Stocks for 2016 (PGLC)

    Discover five micro-cap gold miners that are well-positioned for a positive year in 2016, even if gold prices remain under pressure.
  6. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  7. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  8. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  9. Stock Analysis

    The Biggest Risks of Investing in SandRidge Stock

    Learn about the significant risks of investing in SandRidge. Read how the company may not be able to service its substantial debt load.
  10. Economics

    Will Silver Recover in 2016? (SLV, GLD, JJC)

    The end of the silver downtrend is likely to coincide with similar recoveries in gold, iron and copper.
RELATED FAQS
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  4. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center