Harness More Upside with Gold

by Nick Hodge

Nick Hodge

Gold investors have had a lucrative last couple of years.  And they’re about to reap even more profits in the years ahead. 

Between rising consumer prices, easy-money government policies and mining constraints, gold is headed for its second major rally in as many years.

Gold is now up more than 12% since early March, and is knocking on $1,900’s door. A move above that price would likely send gold to new highs.

Bullion funds like the SPDR Gold Trust (NYSE: GLD) provide easy exposure to the yellow metal — especially for novice investors who might only have a few dollars to spare for their entire gold position. 

But it’s not the most lucrative way to play gold’s rise. 

That distinction goes to a relatively obscure segment of the gold industry known as gold royalties and streaming. 

What Is Gold Streaming — And Why Will It Beat Bullion in the Coming Rally? 

In short, the term “gold streaming” describes an arrangement in which a company provides up-front cash financing to small, upstart miners in exchange for the right to buy gold from those miners at reduced prices in the future. 

In other words, a gold streamer is basically a sort of “gold mining venture capital” company that makes loans to mines and is paid back in gold. 

This arrangement allows streamers to reap the benefits of junior mining exposure — like the leveraged returns miners are known for — while spreading risk across assets and jurisdictions.

The chart below explains this relationship and how you can harness greater upside for gold. 

It’s the same gold chart from above, this time with the VanEck Junior Miners ETF (NYSE: GDXJ) and the most well known royalty company, Franco Nevada (NYSE: FNV), added in. 

At the same time gold is up 12%, the junior miners are up 22%, and the royalty company is up 38%. 

The royalty company also didn’t dip hard in late March like the junior miners. 

The results are clear: gold streaming and royalty companies deliver greater upside than gold and gold miners with less risk. 

With this in mind, royalty companies like this seem to be the perfect investment for the coming gold rally.

How To Invest In Gold Streaming 

Wheaton Precious Metals (NYSE: WPM), Franco-Nevada (NYSE: FNV) and Royal Gold (NASDAQ: RGLD) are three of the largest gold companies in the world — and they’re all primarily streamers. 

The best time to get into these stocks would have been at their March lows — and the second best time is now. 

We’ve put together a video about the streaming model and why new players within it are poised to deliver higher returns than the established companies like Wheaton and Franco. 

Click here to see that research now. 

Call it like you see it, 

Nick Hodge

Nick Hodge,
Publisher, Resource Stock Digest

Nick Hodge is the co-owner and publisher of Resource Stock Digest. He's also the founder and editor of Foundational ProfitsFamily Office Advantage, and Hodge Family Office . He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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