Gold is trading near two-month highs around the US$1,320 per ounce level today on the back of renewed tensions in Iraq. Overnight on Wall Street stocks rallied despite data being released which showed first-quarter US GDP had contracted by a massive 2.9%.
With continuing uncertainty over the strength of the global economic recovery, ongoing money printing and flash points including Ukraine and Iraq, there are a number of reasons for investors to own gold as a hedge.
Gold as a contrarian investment theme also holds appeal.
As always, owning the lowest cost producers is a safer option and given there is no telling if the price will rally significantly from here – price support seems more assured – the highly leveraged, high cost producers are probably best avoided.
Here are five stocks which are popular amongst investors:
Investment bank Goldman Sachs is looking favourably upon Alacer Gold Corp – CDI (ASX: AQG) and Beadell Resources Ltd (ASX: BDR); meanwhile three other producers I'm keeping an eye on are Silver Lake Resources Limited. (ASX: SLR), Northern Star Resources Ltd (ASX: NST) and Kingsgate Consolidated Limited (ASX: KCN).
