Investments: for gold lovers what stocks to buy

March was a historic month for gold which reached prices at historical maximum levels. Although the typical factors that trigger increases did not appear, such as central banking policy, economic development or geopolitics, analysts argue for technical causes.

Despite everything, ETF investors have sold more than 85 tons of the precious metal since the beginning of the year. So what’s up?

Apparently there is a genuine positioning that is supported by the structurally greater demand of Chinese central banks and savers. For this reason, in the market they risk that gold does not seem to be particularly overrated despite the recent movement, and even, according to what they bet could continue climbing in the short term.

Therefore, the higher risk environment ahead leads one to think that gold continues to be a good reserve of value in reference to the level of uncertainty, but not only linked to the Federal Reserve (Fed) rate cuts but also to the geopolitical volatility surrounding the conflicts in Ukraine and Gaza, or that generated by the US presidential elections in November, with a strong possibility of Donald Trump returning to the White House, which will likely result in greater geopolitical tensions .

Therefore, maintaining gold or increasing holdings, or even shares linked to the precious metal, is, according to the strategists of the legendary German group Berenberg, an interesting option. But What stocks to invest in if you want to bet on gold?

Investments in gold: which are the most recommended

In this regard, the German bank’s analysts, who consider that valuations are attractive and see a clear rebound in share prices, recommend exposure to large-cap securities, Wheaton Precious Metals (quality, stability and high margin) or, for a revaluation operation after a challenging first quarter, Endeavor Mining.

In the case of the latter, they point out that it is time to look beyond the noise following the departure of the previous CEO and take a look towards 2024 volume growth, increased cash flow generation, falling leverage and increasing shareholder returns from 2025.

In the mid-cap sector, stand out Centamin, Hochschild Mining, Pan African Resources and Resolute Miningbecause they are actions with short-term catalysts to raise share prices, and they are key in this market.

As for the diversified ones, they prefer Rio Tinto because it offers a 7% dividend yield by 2024, trades at a discount to net worth, and has the lowest risk equity history compared to its peers. Furthermore, as they maintain a positive view on China heading into the second quarter, this also supports Rio Tinto as a favorite option.

On the other hand, they maintain their hold rating on the securities. Anglo Americanof which they say that the operating results are key to a revaluation, and also about BHP, although they believe that the results of the projects are risky. While they remain neutral on base metals this spring, they highlight Central Asia Metals and Griffin Mining due to its attractive valuation, the latter being well placed to benefit from a rebound in China.

As for the clearly undervalued stocks, they stand out: Tharisa which took matters into its own hands and launched a $5 million share buyback, while Ecora Resources continues to offer compelling medium-term growth at a too-cheap valuation. They also believe that the risk of permits is the reason why Base Resources trading at 0.19 times liquidation value. In the case of improvement in this aspect, they see significant upside potential in the shares.

Lastly, they highlight Rainbow Rare Earths as a large project, whose shares do not reflect its value, while Sovereign Metals is a clear acquisition target for Rio Tinto, given the relationship between both companies.