Worried about a recession? Buy this best gold stock today
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When writing, the S & P / TSX Composite Index is up almost 17% since the start of the year. The considerable positive momentum in the equity markets has inspired a lot of investor confidence which continues to drive Canadians to growth stocks at higher valuations.
However, there comes a time when the markets go through a period of correction. When this happens, users can start offloading left, right, and center actions. The result is a broader overall market decline, as investors start to panic. It’s impossible to accurately predict or time a stock market crash, but you should never forget that it is a possibility, especially in market conditions like today.
Planning for a market correction does not mean selling all your winning bets and running away from the stock market with all your money. Not all assets tend to fall during larger declines in the stock market.
Today i will chat Barrick Gold (TSX: ABX) (NYSE: GOLD). It is a business that could be a great asset to hold during a market correction due to the inversely proportional nature of gold prices to the overall economy.
Ideal mining operations
Barrick Gold owns and operates several valuable mining operations around the world. Two of the company’s mines in Mali have managed to produce significant amounts of gold and copper, despite political unrest in the country. The mines are expected to exceed the company’s production forecasts.
The company has also expanded its mining operations elsewhere to continue to perform better. Barrick Gold’s management has established strong partnerships across the country to continue mining operations and extend the life of its operations.
With surface deposits in its mining operations in the Democratic Republic of Congo and its Acacia mines in Tanzania, the gold producer has unlocked more potential to increase its production capacity and continue to generate exceptional returns. Better understanding of the company’s geology has always provided good results for Barrick Gold, and the company plans to continue to extend the life of the mine in several locations for years to come.
Take away food
Barrick Gold shares have made significant progress in recent years. The company had a rough time when gold prices fell five years ago and the company was heavily in debt. However, the rise in gold prices since 2016 and management’s focus on debt repayment and improving operational efficiency has allowed Barrick Gold to become significantly profitable again.
Barrick Gold’s management capitalized on the company’s free cash flow last year to become virtually debt-free. The company appears poised to continue to allocate its growing cash flow to become increasingly profitable in the years to come.
A stock market crash could again dramatically increase gold prices and improve profit margins for gold producers. Adding Barrick Gold stocks to your investment portfolio could allow you to take advantage of the impact of a stock market crash on the economy and richer investor when the dust settles.