Gold prices are quickly nearing $3,000.
And while you can always invest in gold, you may want to consider gold miners instead.
That’s because gold mining stocks often outperform the price of gold. That’s because higher gold prices can result in increased profit margins and free cash flow for gold miners. In addition, top gold miners often have limited exposure to riskier mining projects.
Also, according to Capital.com:
“Gold miners have traditionally outperformed bullion in bullish markets, due to the way these companies use their operating leverage in order to increase profits, which leads to a boost in share prices. Thus, this is largely due to profit expansion, as miners are able to sell appreciating gold fairly quickly, thus avoiding a decline in prices, whereas their own operational costs rise much more slowly.”
Some of the best ways to trade gold mining stocks include:
VanEck Vectors Gold Miners ETF (SYM: GDX)
One of the best ways to diversify at less cost is with an ETF, such as the VanEck Vectors Gold Miners ETF (GDX). Not only can you gain access to some of the biggest gold stocks in the world, you can do so at less cost. With an expense ratio of 0.51%, the ETF holds positions in Newmont Corp., Barrick Gold, Franco-Nevada, Agnico Eagle Mines, Gold Fields, and Wheaton Precious Metals to name a few.
Sprott Junior Gold Miners ETF (SYM: SGDJ)
With an expense ratio of 0.35%, the SGDJ ETF seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index, the Solactive Junior Gold Miners Custom Factors Index. The Index aims to track the performance of small-cap gold companies whose stocks are listed on regulated exchanges.
Some of its top holdings include Lundin Gold Inc., Seabridge Gold, Equinox Gold, Victoria Gold, Westgold Resources, Osisko Mining, K92 Mining Inc., Novagold Resources, Regis Resources, New Gold Inc., Sabina Gold & Silver, Argonaut Gold, Centerra Gold, Coeur Mining, Skeena Resources, and K92 Mining to name a few.
Further Reading: The 2 Best Stocks to Play Trump’s “Stargate”
The first is a little-known company that already got a takeover offer from Nvidia.
The second is a firm that’s trading at just $20 a share and has an 8% yield.
