The precious metal players seem to have taken a few backward steps following Donald Trump’s presidential win. Undoubtedly, the stock market is in a strong spot after the election, with the risker, higher-reward plays surging while the risk-off and hedging plays run out of steam, at least on a relative basis. While gold prices have moved higher in recent sessions, there’s really no telling where the shiny yellow metal will settle as we close out the year.
Either way, I think any recent weakness in gold is more of a buying opportunity than a sign that it’s time to ditch risk-off assets in favour of high-multiple growth stocks, most notably the disruptive innovators at the front of the pack on generative artificial intelligence (AI).
A golden opportunity in the gold miners?
The way I see it, it’s far better to start looking to risk-off assets, like gold, when most others are more than willing to extend themselves a bit on the risk front. Though I have no idea if there’s more near-term pain in the cards for the price of gold, I still think several risks could sustain a bounce back to new highs over the next few years.
Whether we’re talking about geopolitical risks or an untimely return of high inflation, a number of factors could pave the way for even higher gold. And though I’m not against going for physical bullion or the exchange-traded funds (ETFs) that track the price of gold, I see more value in some of the well-run miners out there.
In this piece, we’ll check in on two solid precious metal miners, which also have pretty solid dividends that will pay you to wait for gold prices to trend higher again. So, if you’re looking for a cheaper way to play another golden run, the following seem worth following right now.
Agnico Eagle Mines
Agnico Eagle Mines (TSX:AEM) is an interesting gold mining play that investors have been starting to pile into so far this year. With shares of AEM flirting with new all-time highs, questions linger as to whether there’s still value to be had in the top-tier miner. Now up close to 59% year to date, it seems like a golden opportunity (please pardon the pun) has come and gone.
Still, I believe it makes sense to pick up shares if you believe gold prices will trend higher in the new year. If you’re at all worried about a potential inflationary return, I’d argue allocating a portion of your TFSA (Tax-Free Savings Account) to this gold miner makes a lot of sense.
The stock boasts a 1.84% dividend yield and trades at 16.9 times forward price to earnings (P/E). That’s a low price of admission to one of the best miners in the scene.
Barrick Gold
If you seek deeper value, perhaps Barrick Gold (TSX:ABX) stock is worth a look while it’s fresh off a nearly 16% correction off its 52-week highs close to $29 per share. Though ABX stock is still down almost 36% from its 2020 highs, I still see a path to new heights, especially if the price of gold continues inching higher in 2025.
With a 9.7 times forward P/E multiple and a bountiful 2.17% dividend yield, perhaps ABX is a top value play to consider buying. While it’s a world-class producer, the miner has been subject to analyst downgrades of late. Hefty costs and modest production at some of its mines (like its one in Nevada) are part of the reason why. I think such negativity is now overblown.