Top 5 Gold Mining Stocks For Growth Investors Right Now

Gold has been on fire lately, exhibited by its impressive price performance. The yellow metal’s prices have surged roughly 28% year to date, largely driven by strong safe haven demand amid intense uncertainties following UK’s market-jolting decision to exit the European Union (EU), the U.S. Federal Reserve’s dovish stance, volatile equity markets and global growth worries.

What's Causing the Gold Rush?

Gold prices shot up to a fresh two-year high last Wednesday as worried investors continued to scoop up the metal amid an uncertain global political and economic environment and growing expectations of further monetary easing by global central banks to avert economic damages from Brexit.

While prices for the shiny metal ended lower last Friday due to better-than-expected U.S jobs reports for June, they still notched up a sixth straight weekly gain. The U.S. economy created 287,000 jobs in June (the biggest gain in eight months), trouncing the consensus estimate of 175,000.

Gold prices broke above the $1,300 per troy ounce threshold last month after Britain voted to leave the EU, sending shockwaves through global markets. The move roiled global financial markets and sparked as much as around 8% surge in the metal’s prices to trade at levels last seen in Jul 2014. The Brexit-induced tumult in the global markets spurred investors’ demand for safe havens, triggering a strong rally in gold.

Another key factor behind gold’s recent upturn is the U.S. Federal Reserve’s move to keep interest rates steady in its June meeting. The Fed left benchmark interest rates unchanged while giving no clues on timing of the next rate hike. The central bank also stated that it needs a clearer economic picture before increasing interest rates again.

Moreover, introduction of negative interest rates by several of the world’s central banks including Japan has contributed to gold’s rebound this year. Growing expectations that central banks around the world will step up monetary stimulus in the wake of Brexit are also driving gold prices of late.

What Could Keep the Rally Going?

The intense market uncertainty stirred up by Brexit is expected to continue to drive investors’ appetite for safe-harbor assets, particularly gold, in the coming days. Some analysts feel that gold prices could touch the $1,400 an ounce level in the near future given the profound impact of Brexit on the global markets and macroeconomic uncertainties.

Notwithstanding the upbeat June employment report, concerns about global economic growth, fresh signs of slowdown in the Chinese economy (manifested by recent weak manufacturing data) as well as economic and political uncertainties in a post-Brexit world are likely to prompt the Fed to hold off on raising interest rates for now. A delay in raising interest rates elevates demand for gold, which produces no income but relies on price appreciation to lure investors.

A good monsoon season in India will also bring the prospects for a bigger harvest, which in turn is expected to boost purchasing power of gold among farmers and support gold demand. The farming community accounts for bulk of gold purchases in India. Prices of the metal should also find support from physical demand from top consumers India and China during the festive season later this year.

5 Growth Stocks to Buy

The momentum for gold is expected to continue moving ahead as the conditions for the metal’s recent rally remain in place. Amid this favorable backdrop for bullion, it would be a good idea to invest in some gold mining stocks that boast solid growth prospects and are well placed to capitalize on the rebound in the gold market. Our selection is backed by a good Zacks Growth Style Score and Zacks Rank.

We narrowed down our choices with the help of our new style score system.

Our research shows that stocks with a Growth Style Score of ‘A’ or ‘B’ when combined with a Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) offer the best investment opportunities in the growth investing space.

B2Gold Corp. (NYSE:BTG)

Vancouver, Canada-based B2Gold explores and develops mineral properties in Nicaragua, the Philippines, Namibia, Burkina Faso and Chile. The company primarily explores for gold, silver and copper.

The stock holds a Zacks Rank #1 and has a Growth Style Score of ‘A’. The company has expected earnings growth of a staggering 800% for the current year. B2Gold has seen its shares surge around 191% so far this year.

Sandstorm Gold Ltd. (NYSE:SAND)

Vancouver-based Sandstorm Gold concentrates on acquiring gold and other precious metal purchase agreements and royalties from companies that have advanced stage development projects or operating mines.

Sandstorm Gold holds a Zacks Rank #1 and sports a Growth Style Score of ‘B.’ The company has expected earnings growth of 150% for the current year. The stock has also gained around 86% year to date.

Golden Star Resources, Ltd. (NYSE:GSS)

Canada-based Golden Star owns and operates gold mines in Ghana as well as other parts of the world.

The stock sports a Zacks Rank #2 and has a Growth Style Score of ‘A.’ The company has expected earnings growth of around 104% for the current year. Its shares have skyrocketed roughly 359% so far this year.

New Gold, Inc. (TO:NGD)

Vancouver-based New Gold is engaged in acquisition, exploration, development, and operation of mineral properties and mainly explores for gold, silver, and copper deposits.

The stock has a Zacks Rank #2 and sports a Growth Style Score of ‘A.’ The company has expected earnings growth of 40% for the current year. New Gold has seen its shares surge roughly 109% year to date.

Franco-Nevada Corporation (TO:FNV)

Toronto-based Franco-Nevada is a gold focused royalty and stream company with additional interests in platinum group metals and other resource assets. The company holds a Zacks Rank #2 and sports a Growth Style Score of ‘B.’ Franco-Nevada has expected earnings growth of around 28% for the current year. Moreover, the stock has gained roughly 74% so far this year.