5 Soaring Top-Ranked Gold Stocks With More Upside Potential

Gold is surging this year on the back of escalation in U.S.-China trade war, global growth concerns, and global easy monetary policies. Notably, the yellow metal topped $1,500 per ounce for the first time since April 2013, bringing its year-to-date gains to over 18%. This is much higher than gains of nearly 15% for the S&P 500.

Trade Dispute

Trade tensions worsened with Trump’s new tariff of 10% on the remaining $300 billion of Chinese goods and China’s retaliation by allowing its currency yuan to drop to an 11-year low. China also reportedly halted import of U.S. agricultural products. Additionally, Trump-branded China as a currency manipulator thereby triggering a currency war. The tit-for-tat situation has raised concerns over the global economy, which is already witnessing a slowdown.

The International Monetary Fund (IMF) has recently cut its global growth forecast to 3.2% from 3.3% for this year and to 3.5% from 3.6% for the next, citing further U.S.-China tariffs, U.S. auto tariffs, weaker investment, disruption of global supply chains and severely slow global growth.

Against this backdrop, gold is considered a great store of value and hedge against market turmoil.

Global Easing

The Federal Reserve in its latest meeting cut interest rates by 25 bps to 2-2.5% for the first time since the 2008 financial crisis. This has propelled the yellow metal higher as lower rates will continue to weigh on the dollar against the basket of currencies, raising the yellow metal’s attractiveness given that gold does not pay interest like fixed-income assets.

Additionally, other central banks across the globe are also resorting to easy policies by cutting interest rates or launching stimulus that has boosted the yellow metal.

How to Play?

Given the optimism and intense buying pressure on the yellow metal, gold stocks have been surging this year. Below, we present five such high-flying stocks that will continue to outperform given their solid Zacks Rank #1 (Strong Buy) or 2 (Buy) and double-digit earnings growth. Additionally, these stocks have a VGM Score of B or better.

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