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This chart shows today's hottest investment

by , 03 October 2019
This chart shows today's hottest investment
Right now there's one sector I'm particularly excited about on the JSE.

I recently banked a 150%+ gain from a share in less than 4 months in this sector, and I believe it has only started running.

I'm talking about Gold…

And while the shiny metal itself has delivered investors very good returns over the years, right now gold miners are in an even better position to profit.

Let me explain.
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The gold price catalyst that could send this sector soaring
 
The dollar gold price is around a multi-year high point. But it’s still some way off its all-time highs.
 
So why am I so excited about gold?
 
Well, it’s all got to do with the rand gold price.
 
You see, if the gold price in dollars is too high, international gold miners from all over benefit, increasing production and that extra supply pushes the gold price down again.
 
But if the rand is very weak, it benefits South African gold miners while the international companies don’t benefit from it.
 
And right now the rand is really weak.
 
It crashed back to R15.32 to a dollar. That means we’re close to the weakest the rand has ever been to the dollar!
 
That in turn means SA gold miners are making millions more.
  
The gold price in rands is the highest in history

 
This chart above is all you need to see the truth.
 
The gold price has never been higher than where it is now.
 
Back when gold hit $1,900, South African miners couldn’t even get close to the profits they are bagging right now…
 
Yep, SA gold miners are pocketing R710,000 – R720,000 per kilogram of gold.
 
This time last year the gold price was R495,000.
 
That means for doing no more work than they did a year ago, gold miners are getting R225,000 per kg more for their product. That’s an increase of 45% in a single year!
 
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So what are the best ways to invest in gold?
 
Gold investment #1 – Krugerrands
 
You should own some Krugerrands. These are very handy, safe investments. In short – a Krugerrand can be converted into currency anywhere in the world. They have a standardised value – and tracks the gold price.
 
This is handy as an ‘emergency’ stash. Krugerrands also do not attract capital gains tax – so there’s that benefit as well.
 
Gold Investment #2 – ETF’s
 
Gold ETF’s track the gold price in the same way that Krugerrands do. The difference being they trade on the stock market and are backed by gold in a vault somewhere. So you don’t actually hold real gold in your hands.
 
This is safer – in terms of the risk of your gold being stolen – but it is also costlier. Gold ETF’s charge an annual management fee that covers the costs of being listed, of admin and storage costs for the gold. This isn’t massive but it can take anywhere between 0.5% to 2.5% off your investment per year.
 
Gold Investment #3 – Gold miners
 
Gold miners are the riskiest kind of gold investment because they are very sensitive to changes in the gold price. But they’re also the ultimate way to make BIG gains from increases in the gold price.
 
You see, let’s say a gold miner produces 1,000 kg of gold a year.
 
Its production cost is R400,000/kg.
 
So at last year’s gold price it made R95,000/kg profit, or a total profit of R95 million.
 
Now, the gold price is up 45% to R720,000 and the gold miner makes a profit of R320,000/kg. That means a total profit of R320 million a year.
 
So, a 45% increase in the gold price could lead to a 236% increase in profits.
 
And when profits rise this much dividends and share prices follow!
 
Right now my favourite gold miner is up 43% in the past year. But I foresee much larger gains in the coming year as this company has completed a major new project that will add significant extra gold production to its bottom line – increasing profits and paying off debt. Check out my Red Hot Penny Shares newsletter for more info on this company.
     
Here’s to unleashing real value,
Francois Joubert,
Editor, Red Hot Penny Shares
 
P.S: Discover how you can: Get the most BANG for your BUCK with GOLD


This chart shows today's hottest investment
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