Gold continues to be a vexing stock investment for many because of the potential versus the reality. Many investors realize that inflation is a looming issue, especially as economies start to heat up and the continued cheap money policies around the world stay in place. They also know that between geopolitical uncertainty and Asian and Indian demand, there is at least a floor for the precious metal. The problem? The price seems range-bound at best, and the bears proclaim the gold trade is over.

The fact of the matter is that gold demand tends to vary with the spot price. Above $1,300 it slows, below that level, retail and institutional buyers are interested. A new report from RBC highlights the fact that while the spot price has remained range-bound and tepid, some of the top producers are up far more this year than the S&P 500 is.

We screened the RBC coverage universe and found four top stocks to buy that they have at least a 40% upside target price. All four are rated Outperform at RBC.

Agnico Eagle Mines Ltd. (NYSE: AEM) completed the joint acquisition of Canada’s Osisko Mining and its Canadian Malartic mine this summer, which the company purchased together with Yamana Gold. The Osisko deal guided investors on both companies in recent months, so any positive news on the performance of the Malartic mine could have an immediate effect on valuation. Most Wall Street analysts feel that consolidation at attractive prices could become much bigger in the space.

Investors are paid a 0.9% dividend. The RBC target price is posted at $49. The Thomson/First Call estimate is $41.22. The stock closed Monday at $33.82. A move to the RBC target would be almost a 45% move.

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Barrick Gold Corp. (NYSE: ABX) is another top name rated Outperform at RBC and was added to the Goldman Sachs Conviction Buy List early in August. Between asset sales and new equity, the company has raised nearly $4 billion in liquidity. Coupled with a lower dividend payout of $235 million and reduced capital expenditures, Barrick should generate about $1.2 billion in free-free cash flow. That is a number investors can be excited about.

Barrick pays investors a 1.1% dividend. The RBC price target for the stock is $25. The consensus target is $20.22. Barrick closed Monday at $16.74, so trading to the RBC target would be almost a 50% gain.

Goldcorp Inc. (NYSE: GG) is another stock rated Outperform that ranks high at RBC on the potential for upside. The company operates as a gold producer involved in the exploration, development and acquisition of metal properties in Canada, the United States, Mexico and Central and South America. Over the past years, Goldcorp has been altering its mine plans, cutting spending and disposing of assets in order to reduce costs and focus on the most profitable production, which the CEO recently warned may be lower than current 2014 estimates.

Investors in Goldcorp are paid a 2.2% dividend. RBC has a $37 price target, and the consensus target is $31.39. Shares closed Monday at $25.11. Trading up to the RBC target would give investors a very solid 47% gain.

Kinross Gold Corp. (NYSE: KGC) is a top small-cap name for investors looking for gold exposure and the ability to buy more shares. The company plans to severely chop capital spending by as much as $555 million this year. With problematic cash flow issues, this makes good sense. Kinross also may be a nice acquisition for a company looking to increase reserves. The company missed on second-quarter earnings but did beat revenue expectations.

The RBC price target for Kinross is dropped to $5.50, and the consensus figure is slightly lower at $5.21. The stock closed Monday at $3.65. A trade up to the RBC target would be a stellar 50% gain for shareholders.

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Having a 5% allocation of gold in a well-diversified portfolio makes good sense for growth investors, especially those with a long-term horizon. With RBC expecting gold to trade at around the $1,400 level from 2015 to 2018, solid money can be made by the savvy and well-run miners at that level.

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