Gold miners are snapping each other up – here’s how to profit

Shares in producers of gold have had lacklustre returns over the past decade. Rupert Hargreaves explains why this is now reversing.

Gold
Over the past five years, the gold price has jumped 44%.
(Image credit: © Getty)

Over the past decade, the gold price has returned 16% in dollar terms, but shares in producers of the yellow metal have struggled to keep up with the value of the underlying commodity.

Barrick Gold (NYSE: GOLD) and Newmont Corp (NYSE: NEM), the world’s largest gold miners, have returned -5.1% and 4.7% per annum respectively (including dividends) over the past 10 years. An equally weighted basket of both stocks would have returned -0.2% per annum.

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Rupert Hargreaves
Contributor and former deputy digital editor of MoneyWeek

Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.

Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.