At the start of this week’s Friday, Canada’s main stock index fell, weighed down by losses in energy shares. Oil prices continue to take a hit over rising worries over the potential economic damage from a coronavirus outbreak.
At the same time, gold continues to gain momentum as investors are plowing into the yellow metal as a safe haven in times of increasing economic uncertainty. Last week, the S&P/TSX Composite Index lost 1.41% of its value amid virus fears, whereas the Gold Index gained 1.02%. This is proof yet again that gold has established itself as a defensive asset.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.4% as gold futures rose 0.2% to $1,561 an ounce. Gold prices are expected to mark the highest weekly-close in nearly seven-years, but a bullish market is still not clearly visible.
The move of gold prices was partly fuelled by the unchanged interest rates as investors frantically search for alternative ways to keep their money safe. The amount of old in exchange-traded funds climbed to a seven-year high of 2,561 tons.
Canadian Maple Leaf gold bullion coins remain the most commonly traded on the TSX as they are easier to buy and sell. They command a slight premium over bars and an attractive investment option for people interested in bullion.
The iShares Gold Bullion Hedged ETF (TSX:CGL) is another strong performer. The ETF fund has managed to replicate the performance of the price of gold bullion. As of January 2020, the fund has $624.6 million in assets and has a net asset value of $12.77 per share. The fund tracks the price of gold quite closely and is up 4% thus far in 2020.
Junior gold mining companies are also benefiting from the impressive run of gold prices. The largest percentage gainers on the TSX this week were Canadian gold miners Detour Gold Corp, which jumped 4.3% and Kirkland Lake Gold, which rose 3.8%.
Gold miner Kirkland Lake has been a popular choice of investors since making its debut on the scene a few years ago. After its listing on the TSX, the gold stock price has surged up by 2,050%! A $10,000 investment upon listing would be worth approximately $214,810 today —a tremndously good return on investment.
This makes Kirkland Lake Gold Ltd (TSX:KL)(NYSE:KL) along with B2Gold Corp (TSX:BTO)(NYSE:BTG) two of the top Canadian gold stocks to buy for portfolio protection this week. B2Gold is a junior gold miner with a significant presence in Colombia, Mali, Burkina Faso, Namibia, and the Philippines. B2Gold is expecting to do over 1 million ounces in 2020, already more than double what the company produced as recently as 2015.
As gold price is chasing a 6-year high, the price of the yellow metal has increased by 19% in the last 12 months alone.