Top Gold Stocks

Top gold industry stocks this month include Lundin Gold Inc., Perseus Mining Ltd., and Alamos Gold Inc., which jumped as much as 57% in the past year while the VanEck Gold Miners ETF (GDX), a key benchmark, fell 1% and the Russell 1000 Index dropped by 13%.

While gold prices have fallen from records in March, they rebounded since early November due to central-bank accumulation, increasing jewelry purchases by consumers, and expectations of slower Fed rate hikes.

Here are the top five gold stocks in three categories: best value, fastest growth, and most price momentum. All data below are as of Jan. 19, 2023.

Best Value Gold Stocks

Value investing is a factor-based investing strategy that involves picking stocks that you believe are trading for less than what they are worth, usually by measuring the ratio of the stock's price to one or more fundamental business metrics. A widely accepted value metric is price-to-earnings (P/E) ratio. Value investors say that if a business is cheap compared with its intrinsic value—in this case, as measured by its P/E ratio—then the stock price may rise faster than that of others as the price comes back in line with the worth of the company.

These are the gold stocks with the lowest 12-month trailing P/E ratio.

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• Centerra Gold Inc.: Centerra operates, explores, develops, and acquires gold and copper properties in British Columbia, Canada, and Turkey. As of Dec. 31, 2021, the company had roughly 4.9 million ounces of proven and probable gold mineral reserves. Centerra said it produced almost 244,000 ounces of gold in 2022.
• New Gold Inc.: New Gold is an intermediate gold producer with properties in Ontario and British Columbia, Canada. The company produced over 347,000 gold equivalent ounces in 2022, achieving its guidance for the year.
• Victoria Gold Corp.: Victoria is 100% owner of the Dublin Gulch property in central Yukon, which includes the Eagle Gold Mine with a reserve of 2.7 million ounces of gold as of Dec. 31, 2021. Victoria Gold also trades over-the-counter (OTC) in the U.S. under the ticker VITFF.
• Torex Gold Resources Inc.: Torex is an intermediate gold producer that explores, develops, and operates its 100%-owned Morelos Gold Property in the Guerrero Gold Belt in Mexico. The company's principal assets include the El Limón Guajes Mine Complex, with open-pit and underground mines as well as a processing plant; and the Media Luna project, an advanced-stage development project. Torex shares also trade OTC in the U.S. under the ticker TORXF.
• i-80 Gold Corp.: i-80 is a gold mining firm with operations primarily in Nevada, where it is engaged in exploration, development, and production. It is 100% owner of the 12,000-acre Lone Tree site in northern Nevada and has four other properties in various stages of development.

Fastest-Growing Gold Stocks

These are the top gold stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.

Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

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• Sandstorm Gold Ltd.: Sandstorm is a royalty company that provides financing for gold mining companies in exchange for the right to a percentage of gold produced from mines. The company has a portfolio of 250 royalties. On Jan. 11, Sandstorm said it sold about 82,400 gold equivalent ounces in 2022.
• Anglogold Ashanti Ltd.: Anglogold is a South African gold mining company with operations, projects, and exploration activities spanning nine countries. It also produces silver and sulfuric acid as byproducts. Operations yielded approximately 2.5 million ounces of gold as Anglogold employed an average of nearly 31,000 people in 2021.
• Agnico Eagle Mines Ltd.: Agnico is a gold mining firm with operations in Canada, Australia, Finland, and Mexico in addition to development and exploration projects in the U.S. and Colombia. The company forecasted gold production of 3.2 million to 3.4 million ounces in 2022.
• Kinross Gold Corp.: Kinross owns gold mining operations in the U.S., Brazil, Mauritania, Chile, and Canada. The company's last quarterly dividend of $0.03 per common share was paid on Dec. 15, 2022. Kinross doesn't have an EPS growth figure in the table above because EPS went from negative to positive for the period in question.
• Lundin Gold Inc.: Lundin is a mining company that operates the Fruta del Norte gold mine in southeast Ecuador, a multimillion-ounce, high-grade gold property. Initial gold production at the site began in November 2019, and the company expects to produce an average of 340,000 ounces of gold per year. The company also has shares that trade OTC in the U.S. under the ticker LUGDF. Lundin said in early January that it produced over 476,000 ounces of gold in 2022, beating guidance.

Gold Stocks With the Most Momentum

Momentum investing is a factor-based investing strategy that involves investing in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock's outperformance, will often purchase the stock, further bidding its price higher.

These are the gold stocks that had the highest total return over the last 12 months.

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• Lundin Gold Inc.: See company description above.
• Perseus Mining Ltd.: Perseus is an Australian gold mining company focused on properties in Ghana and Côte d’Ivoire. The company expected to produce 500,000 ounces of gold in 2022. Shares of Perseus Mining also trade OTC in the U.S. under the ticker PMNXF.
• Alamos Gold Inc.: Alamos is a gold producer operating three mines in Canada and Mexico, with additional development projects in Canada, Mexico, Turkey, and the U.S. The company employs more than 1,900. Alamos recently increased its production guidance for 2023 and 2024 as it expects to decrease costs in the coming three years.
• Yamana Gold Inc.: Yamana is a precious metals producer with gold and silver properties in Canada, Brazil, Chile, and Argentina. In 2021, it produced more than 1 million gold-equivalent ounces. Gold equivalent production for the year was 88% of the company's total production, and silver was 12%. On Nov. 8, Yamana agreed to an arrangement under which Pan American Silver Corp. will acquire all of the company's issued and outstanding shares. As part of the transaction, Yamana also will sell certain Canadian assets to Agnico Eagle Mines. The deal is expected to close by the first quarter of 2023. 
• Torex Gold Resources Inc.: See company description above.

The Impact of the U.S. Dollar on Gold Stocks

The U.S. dollar, or greenback, has had a longstanding relationship with gold dating back to the introduction of the gold standard in the 1880s, through which paper money was directly linked to a specific amount of the yellow metal. Although former President Franklin D. Roosevelt removed the gold standard in 1933, the greenback still closely correlates with gold—and subsequently gold stocks—as the metal is priced in U.S. dollars.

Typically, a strong U.S. dollar means weaker gold prices as demand for the precious metal eases from buyers using foreign currencies. Conversely, demand increases when the greenback loses value, making gold cheaper for offshore buyers. Although the U.S. dollar and gold often have an inverse relationship, both can move in the same direction. For example, during periods of global uncertainty, both assets may rise as investors flock to save haven investments. Due to its finite supply, gold is seen as a hedge against inflation, while the dollar's status as the global reserve currency makes it sought after during times of risk aversion.

Advantages of Holding Gold Stocks in Your Portfolio

Key advantages of holding gold stocks include leveraged upside and liquidity.

Leveraged Upside and Diversification: Buying gold stocks allows investors effectively to make a leveraged bet on the yellow metal's price, as miners can increase production and grow their sales when gold rises in value. Because gold stocks closely follow the commodity's price, the sector also provides a partial hedge against inflation, helping to diversify a "risk-on" equity portfolio. 

Gold Discoveries: Large discoveries can significantly increase gold mining stocks' prices, particularly if a junior miner has a small market capitalization. For instance, Canadian junior explorer Enduro Metals Corp. (ENDMF) announced that it had intersected gold in one of its mines in May 2021. Subsequently, shares of the small miner more than doubled over the next several months.

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