Market Carnage: Why Gold Mining Stocks Could Be Smart Plays

‘Bloodbath’, ‘Carnage’, ‘Recession’, these are the phrases in use at the moment as markets around the world get pummelled.

If you have your money tied up in ETFs, you could get hit hard as markets tumble across the board.

But with every big fall in the markets is an opportunity to invest wisely.

Today’s focus will be on gold mining stocks, which were part of a handful of ASX stocks to escape the carnage of the past couple days.

Let’s have a look at the stocks on the ASX 200 that were up yesterday as markets fell:

market index gold price

Source: marketindex.com.au

With the exception of Breville, APN Outdoor, Amcor and Fortescue Metals Group (which does iron ore), the stocks on the list are ALL gold miners.

Money Morning’s Jason Stevenson has a great guide to gold stocks available in our free report available here.

Big gains for gold stocks could be around the corner

Why is this you ask?

Well for one, gold is traditionally seen as a safe-haven in troubled times.

Since the advent of modern markets, gold has almost always done well when markets fall.

It’s tangible, it’s shiny and it used to be what paper money was pegged to.

Its value has been remarkably resilient despite a near 10-year bull run on global markets.

Here’s its 10-year chart:

trading view graph of gold over 10 years

Source: tradingview.com

Also of note is the fact that gold was up 2.5% yesterday, trading $1,223 at time of writing.

As gold goes up in price, and it could rise significantly if markets implode, gold mining stocks could be a good option for investors.

Even small-cap gold stocks could benefit from a rising gold price.

Food for thought.

Regards,

Ryan Clarkson-Ledward,
For 
Money Morning

PS: If you are looking to make a gold play, check out our free gold report by our resource expert Jason Stevenson.


Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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