With the U.S. Federal Reserve signaling that it may soon tighten monetary policy, some investors are growing concerned about investing in the gold and precious metals space.
However, gold stocks may still have more room to run in the months ahead. That’s because even though tighter monetary policy typically puts pressure on safe-haven assets, shares of gold-related companies have continued to climb since hitting a low in September.
This could indicate that we may see a rally unfold over the long term, as we could be entering yet another upcycle for some gold and precious metal companies.
And this could ultimately benefit some of the ‘less risky’ firms operating in the space, including Royal Gold (RGLD).
Royal Gold is a precious-metal royalty and streaming company. This means RGLD funds mining and exploration projects. And, in return, businesses pay royalties based on a certain amount of mined metals.
This enables the company to benefit from the exposure to the mining and exploration market without having to physically do it itself. As a result, RGLD doesn’t deal with the traditional risks of operating in the sector, including the costs associated with acquiring precious metals.
This strategy has paid off for the company in recent months. In early November, RGLD reported third-quarter earnings per share of $1.07 compared with the estimated $0.90. The company’s revenue was $174.4 million, greater than the anticipated $165.4 million.
And given its strong performance, this trend should continue, as the company’s balance sheet and upcoming projects position it well for future growth.
Biggest Prediction of My 50-Year Career on Wall Street
You may have seen me on Jim Cramer's TV show.
But today, I'm going public with something I've never said on national air… not in any of my appearances on Fox Business or CNBC.
I'm a little nervous about it…
But I stand behind the big prediction I'm making right now… because I've never been more confident that a strange day I foresee coming to America could make you a great deal of money.
Granted, I've made plenty of controversial calls in my 50-year career. Like when I called the collapse of Priceline.com on Mad Money back in 2012.
Many experts didn't believe me.
But the stock plummeted 100 points overnight, showing a 733% overnight gain on one particular trade. I'm told it was the first time CNBC Mad Money held a reprise the next day.
Today, my newest prediction is even bigger.
In fact, I'm going one step further.
I'm giving away the ticker symbol of the #1 stock to buy now… using the same system that bears my name on every Bloomberg terminal on Wall Street.