Gold Stocks: The Rally Investors Have Been Waiting For?

After months of underperforming the market, gold stocks have begun to rally the last six weeks offering a tonne of potential for investors today.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When the pandemic first hit, gold and gold stocks were some of the first assets to recover and rally massively. Gold had already been on the rise, but the pandemic lifted the yellow metal to a new level.

There’s no doubt that the yellow metal got a significant boost from the pandemic. However, the major rally in gold prices actually started a year earlier. From 2013 to 2018, gold prices traded rangebound.

By 2019, though, you could make the argument that gold prices had become undervalued, and sure enough, they started to rally significantly. Then as the pandemic hit, gold prices continued to grow higher.

But ever since last summer, as it was clear that companies were finding new ways to grow in the current environment, investors figured there were far more opportunities with recovery companies or businesses growing as a result of the pandemic, such as those in e-commerce.

So naturally, gold stocks fell out of favour, despite gold prices remaining at these new higher levels.

So as these gold stocks have fallen all year and inflation has started to pick up, the catalysts for gold stocks to rally have only been growing.

Now, over the last six weeks, gold prices have only started to rise by about 5%, but these stocks are gaining significantly. So if you’re still underweight gold and want to gain exposure before these stocks rally any further, here are two of the best to buy today.

One of the cheapest gold stocks to buy today

If you’re looking for a high-quality gold stock to buy now, B2Gold (TSX:BTO)(NYSEMKT:BTG) is one of the best opportunities that investors have.

The company is an excellent operator, with low-cost production and consistent growth in the volume it produces each year. B2Gold is an excellent gold stock to buy and hold long-term, especially because it’s such a low-risk investment.

Not only do gold stocks tend to benefit from pullbacks in markets, but it’s extremely profitable, especially with gold prices so high. Furthermore, the company has little debt and a net cash position and now pays a tonne of its earnings back to shareholders.

Over the last month, as gold prices have started to rebound, though, B2Gold has gained almost 15%. So if you’re looking to buy this ultra-cheap stock, you’ll want to act soon.

Currently, it trades at a forward price to earnings ratio of just 9.2 times. Plus, it still offers a dividend that yields upwards of 3.6%. I would act soon, though. In this market environment, gold stocks may only continue to get more expensive.

A high-quality growth stock

Another great investment to consider is Equinox Gold (TSX:EQX)(NYSEMKT:EQX). Equinox is one of the top growth stocks to buy in the gold industry.

The company commenced production only a few years ago and is already producing roughly half a million ounces a year. Furthermore, it expects to grow that production to more than one million ounces a year by 2024.

This is intriguing for investors because Equinox is one of the fastest-growing stocks at a time when gold prices have gained significantly. So not only will it see more income per ounce when prices rise, as will all of its peers, but it’s also rapidly increasing the number of ounces it has for sale.

This makes Equinox one of the best gold stocks to buy now, and recently, like B2Gold, Equinox has been rallying. Over the last six weeks, the growth stock has gained almost 30%.

Even if gold prices don’t continue to rally, it will continue to expand its operations. But should gold prices continue to tick higher, Equinox will surely see a major increase in its profitability.

Gold stocks can play an important role in investors’ portfolios, especially in this environment. So if you’re looking to gain exposure to the precious metal, especially as prices rise, these are two of the best stocks to buy today.

Should you invest $1,000 in B2gold Corp. right now?

Before you buy stock in B2gold Corp., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and B2gold Corp. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Daniel Da Costa owns shares of B2GOLD CORP. The Motley Fool has no position in any of the stocks mentioned.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Metals and Mining Stocks

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

Best Stock to Buy Right Now: Barrick Gold vs Agnico Eagle?

Agnico-Eagle Mines stock continues to soar off of strong results while Barrick Gold grapples with political troubles in its African…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Stocks for Beginners

What to Know About 2 Canadian Mining Stocks for 2025

Mining stocks can be a strong investment, or a bit of a wild ride. So where do these two top…

Read more »

nugget gold
Metals and Mining Stocks

2 Gold Stocks to Consider in the Wake of Trump Tariffs

Investing in gold mining stocks such as Kinross can help you diversify your portfolio and lower overall risk.

Read more »

Metals and Mining Stocks

Value Hunters: It’s Time to Snap Up These TSX Gems

Investing in undervalued gems such as MAG Silver should help you beat the broader markets in 2024 and beyond.

Read more »

A plant grows from coins.
Stocks for Beginners

3 Top Basic Materials Sector Stocks for Canadian Investors in 2025

These three Canadian stocks certainly have a strong future ahead, and now might be time to buy the dip.

Read more »

todder holds a gold bar
Stocks for Beginners

Outlook for Barrick Gold Stock in 2025

Gold stock Barrick may have proven itself in the past, but with geopolitical issues on hand, should investors move elsewhere?

Read more »

nugget gold
Metals and Mining Stocks

Gold Stocks in 2025: Why Royalty Stocks May Outshine Miners

When gold prices surge, mining stocks are typically the better picks. But when there is uncertainty about the metal, royalty…

Read more »

People walk into a dark underground mine.
Metals and Mining Stocks

Better Mining Stock: First Quantum vs Teck Resources?

These two mining stocks offer huge returns and income for investors. But one does seem a bit riskier than the…

Read more »