Hi fellow HCs,
I'm looking to build a basket allocation of quality gold producers in addition to gold holdings. As gold prices continue to rise amid global uncertainties, I believe that investment will increasingly flow into quality, low-cost gold producers. There seems to be a mismatch between the rising gold price and gold equity plays.
Central banks are currently buying gold at record levels in preparation for whatever may come next. This could act as a catalyst for a supply squeeze, as more gold is purchased and stored globally.
My thesis is quite straightforward: gold prices are likely to rise amid global uncertainty, and while central banks continue to buy gold, they can only purchase bullion and not miners directly. Institutional and retail investors, however, have the option to invest in both. Capital will continue to flow into the sector
Gold miners are showing strong margins, relatively low debt, and lower valuations. I thought I would reach out to those more knowledgeable in the gold space for their insights.
I'm looking to build a small basket of perhaps five of the best gold producers—those that are low in debt, well-capitalised, low-cost producers, and undervalued.
I have researched several options over the past six months, but I would appreciate any suggestions to help narrow down my list.
Cheers in advance.
Mitch
