Invest in Commodities through Stock in Gold Companies
Another way to get exposure to commodities of gold is to invest in gold-mining companies. A number of companies specialize in mining, processing, and distributing this precious metal. Here are some of the best companies to consider:
AngloGold Ashanti Ltd. (NYSE: AU): AngloGold, which is listed in five different stock exchanges around the world, is a truly global gold company. Based in South Africa, it operates more than 20 mines and has significant operations in Africa and South America, particularly in South Africa, Namibia, Tanzania, Ghana, Mali, Brazil, Argentina, and Peru, which all have major gold deposits. It has additional operations in Australia and North America.
Barrick Gold Corporation (NYSE: ABX): Barrick is a Canadian company with headquarters in Toronto. It’s a premier player in the gold-mining industry and has operations in Argentina, Australia, Canada, Chile, Papua New Guinea, Peru, South Africa, Tanzania, and the United States. It also has a foothold in the potentially lucrative Central Asian market, where it has joint operations in Mongolia, Russia, and Turkey.
Another good thing about Barrick is that it has one of the lowest production costs per ounce of gold in the industry.
New Gold, Inc. (AMEX: NGD): New Gold is a junior gold-mining company headquartered in Vancouver, British Columbia. It was founded in 2005 and currently operates three highly profitable mines in California, Mexico, and Australia; the cash costs per ounce for each of these mines are in the industry lows, translating into high margins.
In addition, NGD is in the process of exploiting two additional mines, one in Canada and the other in Chile, two mining-friendly jurisdictions. The management team’s successful track record in making acquisitions and operating mines makes this an indispensable investment for anyone looking for exposure to gold markets.
Newmont Mining Corporation (NYSE: NEM): Newmont, headquartered in Colorado, is one of the largest gold-mining companies in the world. It has operations in Australia, Bolivia, Canada, Indonesia, Peru, the United States (Nevada and California), and Uzbekistan. It’s actually the largest gold producer in South America.
Additionally, it has exploration programs in Ghana that may be very promising for the company. If you’re looking for a truly global and diversified gold producer with real growth potential, you can’t go wrong with Newmont.
A number of other mining companies have gold-mining operations that are part of a general mining program that includes other metals, such as silver and copper. The sphere of operations of these companies, however, revolves almost exclusively around gold mining.
The performance of these companies isn’t directly proportional to the spot or future price of gold. These companies don’t give you the direct exposure to gold that gold certificates or bars do, for example. Also, by investing in these stocks, you’re exposing yourself to regulatory, managerial, and operational factors.