Listed below are the 20 best gold stocks HSBC recommends to diversify your portfolio and bulletproof it against market instability. Let’s dig deep to find out why HSBC analyst Volker Borghoff picks this list as his favorite armor against uncertainty. According to the analyst, the best gold stocks to buy are as follows:
- Pan American Silver Corp. (USA) (NASDAQ:PAAS)
- Fresnillo Plc (NASDAQ:FNLPF)
- Detour Gold Corporation (NASDAQ:DRGDF)
- Yamana Gold Inc. (USA) (NYSE:AUY)
- Newmont Mining Corp (NYSE:NEM)
- Randgold Resources Ltd. (ADR) (NASDAQ:GOLD)
- Royal Gold, Inc (USA) (NASDAQ:RGLD)
- Goldcorp Inc. (USA) (NYSE:GG)
- Agnico Eagle Mines Ltd (USA) (NYSE:AEM)
- Kinross Gold Corporation (USA) (NYSE:KGC)
- Eldorado Gold Corp (USA) (NYSE:EGO)
- Franco Nevada Corp (NYSE:FNV)
- Newcrest Mining Limited (ADR) (OTCMKTS:NCMGY)
- Silver Wheaton Corp. (USA) (NYSE:SLW)
- Industrias Penoles SAB de CV (NYSE:IBA)
- Shandong Gold Mining Co., Ltd (SHA:600547)
- Tahoe Resources Inc (NYSE:TAHO)
- KGHM Polska Miedz SA (WSE:KGH)
- Korea Zinc Co Ltd (KRX:010130)
- Freeport-McMoRan Inc (NYSE:FCX).
In the midst of political and economic uncertainty around the globe, Gold is seen as a safe haven for funds by many, and HSBC analyst Volker Borghoff agrees. He weighed in on his top 20 gold stocks that are most positively correlated to the price of gold.
The analyst believes that gold stocks are set to benefit from the political uncertainty after the EU referendum in the UK. “Stocks that exhibit a high sensitivity to the gold price could offer a hedge in such an environment,” the analyst notes, commenting on the aftermath of the Brexit. The analyst affirms that the stocks that benefit the most from the price of gold are gold stocks themselves, or stocks of mining companies that have a decent exposure to gold.
The analyst focuses on a defensive investment strategy to persevere during overall market uncertainty caused by the Brexit. Borghoff offers, “Our strategy does not need to be changed; we were skeptical with regard to the economic cycle and thus our strategy has been defensive already, focusing on the winners of additional monetary easing, and more precisely additional declining bond yields.” The analyst notes that gold is often a great defensive investing idea as gold stocks generally benefit from political and economic uncertainty.
The majority of the 20 stocks listed above stem from North America, be it from the U.S. or from Canada. The analyst notes that the recommendations are expensive relative to the market and explains, “These stocks diversify our strategy as they exhibit different characteristics with the exception of momentum.” These stocks provide a hedging opportunity against the U.S. dollar; with a depreciation in the dollar will come higher gold price, and vice versa.
Taking into account everything that’s going on in the world, gold could be a great place to put your money, at least for the next few months, according to Borghoff. Will your portfolio be up to the gold standard?
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