8 Safe Haven Plays in Gold and Silver

With stock markets across the world tumbling over uncertainty related to the coronavirus, investors continue to move into traditional safe havens such as gold, which has moved to a seven-year high. Several leading gold experts, and contributors to MoneyShow.com, offer their favorite ideas among precious metals stocks. Omar Ayales, Gold Charts R Us Gold is showing impressive strength. For the first time this year, gold shares are rising together with the metal. Most impressively, gold is shining even as the dollar flexes its muscles. Their relationship is ongoing and both could remain strong, at least as long as concerns over the spreading virus remain a driver. In addition, silver is showing momentum shifting to the upside. We recently began picking up some gold shares during weakness. Here's a look at the three current buys in our portfolio. Hecla Mining has become a great recovery story that's gaining even more steam. The firm's recent investment upgrade and commitment to pay off its debt is positioning the company to benefit greatly from gold's secular rise. The stock is showing strong support at its 15-week moving average near $2.90. The recent bounce up confirms support and shows strength. The stock could rise further; a break above the January highs near $3.50 would reconfirm strength, while failing to do so could expose weakness. Another one of our positions, Agnico Eagle Mines dropped nearly 20% recently even though the company posted a strong quarter, with record gold production, keeping production guidelines pretty much the same. The company is also hoarding lots of cash. It ended the year with over 300 million in cash (up about 20% from a year earlier). It is looking to pay down debt while staying liquid. Agnico Eagle recently acquired an interest in Rupert Resources Ltd. , which could be pushing the stock lower, temporarily. However, Agnico Eagle Mines has lots going for it as a leader in an industry that's in a secular bull market. We recommend buying additional shares at prices on drops below $50. My last long position is Silvercorp Metals . This is a great low-cost silver company operating with great profit margins. The stock continues to show support above its 200-day moving average, now near $3.90. However, I have my stop a bit lower and will allow some leeway until a bottom is clearly identified. Silvercorp Metals is poised to perform well during gold and silver's secular bull market. Leo Fasciocco, Ticker Tape Digest Wheaton Precious Metals , formerly Silver Wheaton Corp, is a Vancouver, Canada-based pure precious metals streaming company engaged in the sale of silver and gold. With annual revenues of $794 million, the company operates via silver produced by the San Dimas, Penasquito and Antamina mines, the gold produced by the Sudbury and Salobo mines, the silver and gold produced by the Constancia mine and other mines. The company has entered into long-term purchase agreements and early deposit long-term purchase agreements whereby Wheaton acquires silver and gold production at various mines. Over the last 12 months, the stock is up around 45% versus a 22% gain for the overall stock market. The stock has climbed from $25 back in October; technically, the shares put down a flat with a wedge to the upside. The recent upside breakout is impressive coming with a widening of the daily spread and expansion in volume. The stock's momentum indicator is strongly bullish. The stock sells with a price-earnings ratio of about 54. That is high given the growth rates. Net for the fourth quarter should surge 125% to 18 cents a share from the 8 cents the year before. Looking out to 2020, Wall Street predicts a 59% surge in net to 90 cents a share from the anticipated 57 cents this year. The stock is most suitable for aggressive bulls. We are targeting a move to $38 within the next few months, or soon. A protective stop can be placed near $29. Bryan Perry, Dividend Investing Weekly Every gold bug in the world knows the name Yamana Gold Inc. as a company that held great promise as a premier gold and silver mining company. While it has been a great trading stock, it has also been a poor investment. But the stock is now looking like the next move is going to be higher -- maybe way higher. The company took on too much debt on the bet of a bull market in gold prices preceding 2012, only to see the demise of the stock when gold prices crashed to $1,100/oz. in late 2015. It was the quintessential inverted scenario that shuttered a number of junior miners. Taking into account the latest set of Q4 financials, and given that the central banks are the biggest buyers of gold and will continue to be as long as they are printing unlimited amounts of fiat currencies around the world, I believe it is time to revisit this stock again. Fourth-quarter gold and silver production was 221,595 ounces and 2.97 million ounces, respectively, in line with the plan. Gold equivalent ounce (GEO) production comprised 256,288. The company's primary objective is to maximize free cash flow, and 2019 was a particularly strong year in this regard. Full-year cash flow from operating activities increased 29% to $521.8 million, while net free cash flow rose 63% to $358.4 million from $219.8 million. Technically, the stock is emerging from a high-volume flag formation where a golden cross is in the making. For traders and investors alike, this is a hallmark of when to take at least a partial position. I believe the next move is likely to $6 per share, assuming gold prices stay in their current bull trend or just move laterally. The stock is valued at less than one times book value, and I, for one, do think that gold prices will continue to trend higher in a world awash in rising debt and devalued currencies. Against this backdrop, Yamana Gold just might be one of the more intriguing turnaround stories of 2020. No promises, but by this time next year, investors might be asking themselves: how on earth did I miss that trade? Mike Cintolo, Cabot Top Ten Trader The growing outbreak of the coronavirus has boosted uncertainty, and one of the big beneficiaries of uncertainty is precious metal prices, especially gold, which has extended its December strength as investors look for safe havens. Franco-Nevada is one of the leading royalty and streaming operators in the sector, with stakes in a few dozen producing mines that crank out mostly gold but also silver, platinum and some copper; interestingly, Franco is also moving into the energy field, grabbing shares from royalty owners and private equity firms that want out. Even so, gold is the big producer here (nearly two-thirds of Q3 revenue), so the spike is set to help, as are some organic expansions going on at a variety of mines has stakes in; analysts see earnings up 26% in 2020, and that could easily prove conservative should prices continue due north. That said, there's actually a longer-term story here - given the ramp at its largest mine (30% gain in output from during the next few years) and its expected investments into energy (leading to a doubling of oil/gas revenue), Franco thinks its cash flow is likely to soar 50% from 2018 to 2023. Obviously a lot of that will depend on prices and future decisions, but with gold back in an uptrend and a solid overall outlook, this company's prospects continue to brighten. Franco-Nevada had a nice run with most precious metals stocks from May through August last year, then based out for a while, with shares tightening up in November and early December. A pickup in gold prices at that point helped the stock break out above $100, and the advance has accelerated this year as the world's uncertainties grow. The shares are extended here, but normal dips should offer good buying opportunities. Jason Clark, The Prudent Speculator Giant precious metals miner Newmont Goldcorp posted adjusted Q4 EPS of $0.50, four cents ahead of analyst expectations, and the price of gold jumped to a seven-year high. CEO Tom Palmer commented, We have the industry's largest gold reserves at 100 million ounces, with nearly 90% located in the Americas and Australia. This offers Newmont shareholders exposure to 124 gold reserve ounces per 1,000 shares. NEM expects to mine 6.4 million ounces of gold in 2020, and between 6.2 million ounces and 6.7 million ounces per year through 2024, along with cost improvements along the way. Divestitures are expected to net the firm an additional $1.4 billion in Q1 2020 and the annual dividend is expected to increase 79% to $1.00 per share (a target that must be formally approved by the board and the final rate will be officially declared in April). The mining business must play the long game with its investment, while being uniquely susceptible to short-term commodity prices, but we think that the company's strong financial position and solid portfolio give us plenty to like. We appreciate the hedge provided by our modest exposure to gold, especially given volatile geopolitical and economic conditions around the globe. That said, we do acknowledge the complexities and obstacles inherent in the mining industry, so we continue to monitor Newmont's efforts to streamline operations and control costs as it integrates Goldcorp. Brien Lundin, Gold Newsletter The coronavirus outbreak is a big deal. But there are plenty of other reasons why gold is going much, much higher. There are irreversible economic trends that will demand a very significant depreciation of the U.S. dollar (as well as other major fiat currencies) and a corresponding, but much greater, increase in the relative values of gold and silver. Simple math shows us that the cost of servicing this massive U.S. federal debt is unsustainable at any interest rate that exceeds the rate that the underlying currency is depreciating. In other words, the interest rate on the debt can't be higher than the rate of inflation. The federal debt has grown to an unmanageable level, thanks to this long epidemic of monetary easing. If the growing irrelevancy of the dollar as a fiat currency reaches its endpoint, what will be the new monetary regime to take its place? My bet is that it would include gold, if not as an official gold standard, then some sort of anchor to give the dollar some credibility. Given the amount gold held in U.S. reserves, at virtually any meaningful backing ratio the new official price for gold would be a considerable multiple of today's levels. Meanwhile, I can't think of a better candidate to become our next big exploration winner than Amex Exploration (Vancouver: AMX). Its Perron project sits within an area in Quebec with a long history of gold production and ready access to infrastructure. Thanks to a couple of recent financings, Amex is fully cashed up, with C$14 million in its treasury to conduct the 60,000 meters of drilling has planned for Perron in 2020. That's on top of the 40,000 meters the company completed on the project in 2019. Assays are still pending from 12,500 meters of that effort. So, there'll be plenty of news flowing from Amex this year. Success with the regional drilling program at Perron could open up a whole new chapter in Amex's story. We've already enjoyed some tantalizing gains with Amex -- its shares are already up more than 75% since my initial recommendation in September. Given the current state of the gold market, I think this company's ceiling remains quite high. Thus, even after the gains of recent months, Amex Exploration remains very much a buy.

8 Safe Haven Plays in Gold and Silver

The coronavirus outbreak is a big deal. But there are plenty of other reasons why gold is going much, much higher.

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