Gold Is Within Striking Distance of Its All-Time High. Here's How to Play the Rally
The time has come. Today the price of gold briefly rose above its all-time record closing price of $1,891.90 per ounce, set in August 2011. Once the precious metal breeches the important $1,900 resistance level, I believe the sky’s the limit.
Both gold and silver have been on a tear this week, with the yellow metal touching a nine-year high of $1,897 in intraday trading on Thursday. Silver was trading above $22.70, up 94 percent from its 52-week low on March 18.
As I told Kitco News back in February, this is a secular bull market we’re in, supported by several factors, and there’s no reason why gold can’t hit $10,000 in the coming years. Remember rhodium? The rare earth metal climbed an insane 22 times, from $625 in July 2016 to as high as $13,850 in March.
Precious metal miners have also outperformed, with the Philadelphia Gold and Silver Index strongly beating the S&P 500 for the year so far, by a factor of 17. Among the best performers year-to-date have been Gold Fields (up 88.4 percent), Harmony Gold Mining (85.7 percent) and Alamos Gold (84.1 percent).
Our favorite way to play the rally remains precious metal royalty and streaming companies, including leaders Franco-Nevada (up 54.4 percent for the year), Wheaton Precious Metals (76.3 percent) and Royal Gold (13.5 percent). The group reported a solid first quarter on higher metal prices, and I’m eagerly awaiting second-quarter results when they begin reporting early next month.
Over the past two years, Franco-Nevada, Wheaton Precious and Royal Gold have seen their combined market cap more than double in value, from $29.5 billion to some $61.5 billion.