Gold futures experienced a significant uptick on December 10, marking the highest close in more than two weeks. This movement was primarily driven by China’s central bank, the People’s Bank of China (PBOC), which resumed gold purchases for the first time in six months, alongside the Chinese government’s commitment to implementing a “moderately loose” monetary policy and a more proactive fiscal stance in the coming year. ETFs tracking as gold, such as the SPDR Gold Trust (GLD), VanEck Vectors Gold Miners ETF (GDX), VanEck Vectors Junior Gold Miners ETF (GDXJ), iShares Gold Trust (IAU), and iShares Silver Trust (SLV), among others, have also seen increased activity in response to the market movements.

The PBOC’s acquisition of approximately five metric tons of gold in November, which is modest compared to previous purchases that sometimes reached 30 tons per month, was a critical factor in the recent gold rally. Analysts at Commerzbank noted that the resumption of gold buying by the PBOC could be a strategic response to the election of Donald Trump, who has threatened to impose tariffs on China. Additionally, the recent dip in gold prices after a series of record highs may have sparked renewed interest in the precious metal. For gold prices to maintain and potentially extend their gains, it is essential that central bank purchases continue in the coming months, Commerzbank analysts emphasized. Another factor supporting the rise in gold prices is the growing expectation among traders that the Federal Reserve will cut U.S. interest rates at its upcoming meeting. According to ActivTrades analyst Ricardo Evangelista, a rate cut would enhance the appeal of non-interest-bearing assets such as gold.

Gold’s Bull Market Expected to Continue 

In an interview with CNBC on December 10, Max Layton, Global Head of Commodities Research at Citi, discussed the impressive performance of gold in the current year and its potential outlook for 2025. Layton noted that this year has been exceptionally strong for gold, with a significant bull market that can be observed over a 50-year chart. He expressed confidence that this trend is likely to continue, citing several key factors.

Citi’s analysts have introduced a fundamental physical flows-based framework for gold pricing, which provides insight into the underlying drivers of the bull market. These drivers include substantial investment from central banks and wealthy over-the-counter (OTC) investors, as well as broader investor concerns about high interest rates and high debt levels in the United States. Additionally, investors are using gold as a hedge against the potential medium-term impact of a U.S. economic slowdown, which has been ongoing for the past two and a half years. The labor market has also been slowing down during this period, and real interest rates remain at 15-year highs, further fueling these concerns. Layton emphasized that as long as these economic issues persist, there will be continued investment in gold as a hedge.

Gold has been shining as a robust investment, driven by renewed buying from central banks, and growing expectations of a U.S. Federal Reserve interest rate cut. With that in context, let’s take a look at the 6 most profitable gold stocks to buy now.

Our Methodology

To compile our list of the 6 most profitable gold stocks to buy now, we used Finviz and Yahoo stock screeners to find the companies that are involved in the production, extraction, processing, or sale of gold. We shortlisted companies with a positive 5-year net income compound annual growth rate (CAGR) and a positive net income in the trailing twelve months (TTM) as informed by SeekingAlpha. Then we used Insider Monkey’s Hedge Fund database to rank 6 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

6 Most Profitable Gold Stocks To Buy Now

6. Sandstorm Gold Ltd. (NYSE:SAND)

Number of Hedge Fund Investors: 18

5-Year Net Income CAGR: 20.73%

TTM Net Income: $35.5 Million

Sandstorm Gold Ltd. (NYSE:SAND) is a Canada-based gold royalty and streaming company, headquartered in Vancouver. The company specializes in acquiring royalties and metal purchase agreements from advanced-stage mining companies globally. Through its business model, Sandstorm Gold Ltd. (NYSE:SAND) provides upfront payments to mining companies in exchange for a percentage of their future revenue or production. As of September 2024, Sandstorm Gold Ltd. (NYSE:SAND) holds a diverse portfolio of 243 royalties and streams, including 41 producing mines.

Sandstorm Gold Ltd. (NYSE:SAND) has a strong focus on key development assets such as the Greenstone Gold Mine, Platreef, Hod Maden, and the Robertson Deposit at Cortez Complex. Greenstone, operated by Equinox, has an average throughput of 20,000 tons per day, which is 76% of the designed capacity. As Greenstone ramps up, it is expected to significantly boost Sandstorm Gold Ltd.’s (NYSE:SAND) gold equivalent production. Similarly, Platreef, a project being developed by Ivanhoe Mines, is poised to become one of the world’s largest and lowest-cost producers of platinum group metals (PGMs) and gold. Once Phase 2 of Platree F is operational, it is expected to contribute about 10,000 ounces of gold per year to Sandstorm Gold Ltd. (NYSE:SAND), with a potential to increase to 15,000 to 20,000 ounces per year during Phase 3.

Sandstorm Gold Ltd. (NYSE:SAND) has a disciplined approach to capital allocation, with a primary focus on debt repayment and selective share repurchases. In Q3, the company repaid $9 million of debt, and this pace accelerated in Q4, with an additional $10 million repaid in the first five weeks. The company’s debt has been reduced to $369 million as of November 8, and this trend is expected to continue. By reducing debt, Sandstorm Gold Ltd. (NYSE:SAND) aims to strengthen its balance sheet and improve its financial flexibility.

5. Fortuna Mining Corp. (NYSE:FSM)

Number of Hedge Fund Investors: 18

5-Year Net Income CAGR: 28.91%

TTM Net Income: $25.1 Million

Fortuna Mining Corp. (NYSE:FSM) is a leading international gold mining company with a diverse portfolio of high-quality assets across multiple jurisdictions. The company operates mines in West Africa and Argentina along with exploration projects in Senegal.

Fortuna Mining Corp. (NYSE:FSM) is actively investing in capital projects to enhance the long-term value of its mines. One of the key projects is the leach pad expansion at the Lindero mine in Argentina, which has a budget of $42 million. This project is expected to be completed by early 2025 and will significantly increase the mine’s capacity and extend its operational life for a decade. Additionally, the company is accelerating underground development at the Yaramoko mine in Burkina Faso, with an additional capital budget of $11 million to bring new mineralized zones into the 2025 mine plan.

Fortuna Mining Corp. (NYSE:FSM) is also focusing on high-value opportunities at the Seguela mine in Cote d’Ivoire, the Diamba Sud Project in Senegal, and the Lindero mine in Argentina. These exploration efforts are crucial for expanding the company’s resource base and identifying new mining opportunities. By continuously exploring and developing new deposits, Fortuna Mining Corp. (NYSE:FSM) aims to increase its gold reserves and production capacity.