Gold Stocks To Watch As Rising Yields And Oil Revive Inflation Fears

With long term bond yields pushing higher and oil above $90, inflation and interest rate shocks are back on centre stage and many investors are rethinking where they want risk. That shift can unsettle portfolios, but it also opens the door for assets that some investors treat as potential hedges. This article walks through three stocks from a Global Gold and Precious Metals Miners screener that appear closely linked to the latest macro story and explains how each might fit, or not fit, into your own view of what comes next.

The three stocks below are a focused sample. The full screen flags 53 additional gold and precious metals companies with equally compelling stories that are not covered here. To identify and analyze potential inflation hedge candidates that suit your own risk profile, head straight into the Global Gold and Precious-Metals Miners as Hedges to Rising Yields and Oil-Driven Inflation Shocks screener.

Capricorn Metals (ASX:CMM)

Capricorn Metals is an Australian gold producer that fits the inflation hedge theme by giving investors direct exposure to gold prices through its Karlawinda and Mt Gibson projects in Western Australia. The business is heavily concentrated in the Karlawinda Gold Project, which generated about A$632 million in revenue, with a small segment adjustment of roughly A$12 million. The stock is a large mid cap with a market value of about A$7.3b.

Capricorn Metals provides direct gold exposure at a time when rising bond yields and higher oil prices are back on investors’ radar as inflation risks. The Karlawinda project has recently reported a 32% uplift in mineral reserves and an expansion plan that indicates a longer mine life and the potential for higher output. These factors support the case for cash flows that are closely tied to gold. At the same time, the stock carries a relatively high P/E and a management team with shorter tenure. As a result, execution and capital allocation are worth watching closely. For investors who want inflation hedge potential linked to a single, expanding Australian gold hub, this is a story that may warrant closer consideration.

Capricorn Metals is expanding around Karlawinda, yet the stock trades on a relatively high P/E that some investors might see as pricing in a lot of progress already. Before you decide where you stand on that mix of growth potential and execution risk, it is worth scanning the analysis report for Capricorn Metals.

Build your own gold hedge shortlist

Capricorn Metals and the other two stocks in this article all surfaced from a single Simply Wall St screen, but the real value comes from setting your own rules. Use our flexible Screener to mix filters on valuation, growth, balance sheet strength and risks, or tap into ready made themes through our Investing Ideas.

Ramelius Resources (ASX:RMS)

Ramelius Resources is a Perth based gold miner that fits neatly into the inflation and yield hedge theme, with operations focused on the Mt Magnet and Edna May hubs and a broader exploration portfolio across Australia. Revenue is heavily concentrated in the Mt Magnet segment, which generated about A$1.1b, with segment adjustments of roughly A$72 million. The stock is a large mid cap with a market value of about A$6.8b.

Ramelius Resources provides direct exposure to bullion prices at a time when higher bond yields and expensive oil are pushing many investors toward potential hedges. The company combines a long operating history with a sizeable Australian project base and has been actively investing in growth, while also running a sizeable buyback and keeping debt low. There are still questions around cost pressures, one off items and how reliably margins can be kept in check as new projects ramp up. For investors willing to accept those trade offs in return for a pure play gold producer, Ramelius may warrant a closer look.

Ramelius Resources combines an active buyback, low debt and an Australian project base that some investors may be underestimating. To see how that mix of strength and risk balances out, review the 3 key rewards and 1 important warning sign

Alamos Gold (TSX:AGI)

Alamos Gold is a North American pure play gold producer that some investors look at when they want direct exposure to bullion in periods of rising yields and oil driven inflation risk. The company generated about US$1.05b from the Island Gold District, roughly US$611 million from Young Davidson and about US$609 million from Mulatos, with a small loss reported in its corporate and other segment. Alamos Gold has a market value of about CA$19.7b.

Alamos Gold offers a pure gold production story that many investors reach for when bond yields climb and oil driven costs keep inflation in focus. The company’s profile includes a growing low cost production base in Canada and Mexico, strong profitability and active cash returns through dividends and buybacks, supported by a solid balance sheet. On the other hand, there is execution risk around large projects such as the Island Gold expansion and Magino mill ramp up, together with cost pressures from labor and higher all in sustaining cost guidance. For investors seeking exposure to a potential inflation hedge with meaningful upside and identifiable operational swing factors, this is a company that some may choose to keep on their radar.

Alamos Gold is building a low cost production base that some investors may be underestimating as major projects continue to ramp up. Before deciding whether this outlook is fully reflected in the share price or if further potential remains, review the 5 key rewards and 1 important major warning sign

Seeking Alternatives Beyond Gold Miners

Fresh ideas move first when momentum builds and before breakout stories get caught by the crowd. Scan curated stock lists while the edge is real and act now.

• Spot strong cash generators before they start flying by running the 14 high quality undervalued stocks that filters for quality businesses still priced as if interest rate shocks never happened.
• Track reliable income payers while yields stay in focus by scanning the 5 dividend fortresses that highlights companies combining high payouts with balance sheets built for stress.
• Get ahead of the next infrastructure build out as electrification momentum grows with the 39 power grid technology and infrastructure stocks that surfaces businesses tied to long term grid investment themes.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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