The gold price has been on a tear in 2024 hitting a record high of nearly $2,400. Over the past six months alone, gold has rallied nearly 20%. And there are a few reasons why…

What does war, de-dollarisation and more have to do with the gold price?

Gold is often regarded as a safe haven during a sharp economic recession/depression, an outbreak of war or a major catastrophe.

So, it’s no surprise to see gold rise during the Israel-Palestine conflict. It’s a conflict that threatens to engage the entire Middle East in war. The longer it continues, the longer the gold price will remain high.

We’re also living in a time where high interest rates and inflation are ravaging economies. And gold acts as a perfect hedge against economic decline.

Another recent growing trend which has brought gold back into the limelight…is “De-Dollarisation”. The continuous printing of dollars has created a US system built on debt.

This debt just keeps growing with no accountability from anyone in the US government.

Ultimately, the dollar is losing purchasing power. Whereas gold maintains it.

As a result, some countries like Russia and China are moving away from the petrodollar system. That’s why we have started to see central banks around the world accumulate gold.

Of course, a rising gold price is great news for JSE-listed gold miner’s profits. Even a small increase in the gold price (or the rand weakening against the US dollar) stands to increase their profitability big time.

Here are two that stand to benefit the most in our view…

#1: Gold stock to watch in 2024 – Pan African Resources (JSE: PAN)

Pan Af is a JSE listed gold miner that owns underground and surface mining operations.

2024’s gold surge has sent Pan Af’s shares over 33% higher so far. However, Pan Af isn’t a short-term wonder.

Over the past five years, its shares have rallied over 220%!

In Pan Af’s recent half-year results, gold production increased from 92,307oz in 2022 to 98,458oz.

Meanwhile, production costs decreased from $1,291/oz to $1,287/oz during this period. And the company’s tailings retreatment facilities produced at super low production costs of $894/oz.

At a gold price of over $2,300, Pan Af’s coining it…

So much so, the company generated $27.2 million in cash for the period – more than DOUBLE the $11.6 million it generated the year before!
Going forward, Pan Af has big growth plans.

Its recent Mogale Tailings Retreatment (MTR) project is coming along nicely.

The MTR project will add around 50,000 ounces of new production a year at $900/oz to its bottom line. At a gold price of over $2,300 today, it offers incredible upside opportunity…

This project is in budget and on schedule, and steady state production is expected by December 2024.

Pan Af is no stranger to tailings retreatment and already has two highly successful operations – Elikhulu at its Evander Gold Mine and the Barberton Tailings Retreatment Plant (BTRP) at its Barberton Mines complex.

So, you can bet this project will be another winner. And it could result in mor upside in the company’s share price.

We’ve recommended Pan Af several times over the last 10 years to Red Hot Penny Share readers and it remains one of our favourite gold stocks to watch in 2024.

#2: Gold stock to watch in 2024 – Harmony Gold (JSE: HAR)

Harmony is the largest gold producer in South Africa. It’s also the largest producer of gold from the retreatment of old tailings dams.

The company owns gold operations in Papua New Guinea and SA. It also owns a copper project in Australia.

Harmony is proof that when gold mines perform…they perform well.

Over the past 12 months, Harmony shares are up over 100%. Meanwhile, over five years, its returned an incredible 550%!

Harmony’s last reporting results were excellent, which have been a big mover of its share price.

Not only did Harmony enjoy higher gold prices, but they took advantage of them with a strong jump in production and a 5% decrease in all-in sustaining costs.

As a result, headline EPS grew by a whopping 226% to R9.56 per share. On an annualised basis, Harmony sits on PE of around 8.5.

The company also achieved a record high in cash generation, which increased 265% to R7.1 billion. That led to a record interim dividend of R1.47 per share.

Going forward, Harmony expects great full-year numbers, with annual production and grade expected to be at the upper end of guidance and costs well below the guided level.

If gold continues to trade at today’s higher prices, there’s certainly more upside in Harmony’s shares. For stocks like Harmony and other mid to large caps, then you need our Real Wealth portfolio buys/sells to keep you in the loop here.

PS. If you want all of our best views on what to buy right now then make sure you take up our publisher’s super half price Open House offer on our top 3 stock advisories!

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