Amid recent market turmoil one sector is clearly outperforming.
ASX listed gold miners have been booming this year.
Gold has long been viewed as a hedge against market volatility and those with shares in ASX gold miners have enjoyed solid gains over the past few months.
Northern Star Resources Ltd (ASX: NST) shares are up more than 15% so far this calendar year, roughly tracking the increase in the price of gold.
Newmont Corp (ASX: NEM) shareholders have seen gains exceeding 27%, while Evolution Mining Ltd (ASX: EVN) shares have increased 44% since the start of the calendar year.
Gold Road Resources Ltd (ASX: GOR) shares are up almost 40% year to date, with its share price enjoying a recent surge on the back of news that the company received a takeover offer from South Africa's dual listed Gold Fields (JSE, NYSE: GFI).
I could go on. And I will.
Perseus Mining Ltd (ASX: PRU) shares are up 26%, De Grey Mining Ltd (ASX: DEG) shares are up 18%, and West African Resources Ltd (ASX: WAF) shares are up 51.7%
Looking at these numbers, I'm seriously regretting not having gold stocks in my portfolio.
I'm a big fan of diversification and believe gold should be part of every investor's portfolio.
But I've opted to gain exposure to the precious metal in other ways.
I'm looking for more stability in my gold holdings than what shares in mining companies offer.
Shares of gold miners can still be influenced by market volatility and external factors beyond the company's control, dictating the share price, for better or worse.
Just look at the Gold Road Resources share price surging about 20% in less than a week amid the takeover offer from Gold Fields.
What's wrong with that you may ask? Nothing at all if you're a Gold Road Resources shareholder.
But it's a clear and recent example of how external factors beyond the control of the company's management can influence the company's share price.
In another example at the other end of the spectrum, the Ramelius Resources Ltd (ASX: RMS) has dropped by about 19% over the past two weeks.
The drop in the value of the Rameilus share price comes amid news of expansion plans that were apparently poorly received by investors and an announcement that the gold miner merging with Spartan Resources Ltd (ASX: SPR).
And while some will say the costs of extracting gold from the ground are fairly stable, this is simply not true.
All costs fluctuate. Think energy costs, machinery costs, labour costs, and transport costs, to list a few. And accidents can and will happen.
Is it too late to invest in gold shares?
It's never a bad time to invest in the right gold miner at the right price.
But I still see gold bullion as a more stable investment than investing in gold miners and a more effective way of hedging against market volatility.
