This has proven to be one of the most volatile years since 2018. From the looks of things, it may not get any better until the inflation disaster is sorted out. It could be late fall or even early 2023 before prices slow down. A report from Nomura late last week said that the Federal Reserve may get super aggressive, and we could have the biggest increase in the federal funds rate since 1994, when the benchmark rate went up 250 basis points. They noted the possibility for the Fed to raise rates 50 basis points in May and 75 basis points in June and July is growing.
One solid idea now is to look at gold and the top gold miners. Goldman Sachs was out last week once again reminding investors to get aggressive with the portfolio hedging commodity:
The combination of strong investment demand, accelerating Central Bank purchases and resilient consumer demand means that a much higher gold price is needed to keep physical gold markets balanced. Moreover, underlying bullish drivers of each of the three categories are set to remain for the rest of the year, meaning that the bullish gold price trend is set to continue. We therefore reiterate our year-end price target of $2500.
We screened the BofA Securities commodity research universe, as the firm has championed the sector and been bullish for some time, looking for gold stocks rated Buy at the firm that also pay reliable dividends. We found eight great companies for investors to consider now to protect portfolios and take advantage of what could be much higher prices for the rest of 2022.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Agnico Eagle Mines
This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold-mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.
The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983. It will report earnings this week, on Thursday, so investors looking to buy or add shares may want to put on partial positions now and see how the results come in.
Shareholders receive a 2.68% dividend. The BofA Securities price target of $73 is less than the $90.62 consensus stock. Agnico Eagle stock closed Friday trading at $59.60, down close to 4% on the day.
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