Investors digging for gold as tension increases between North Korea and the US

Ian Forrest, investment research analyst at The Share Centre, comments on where investors are turning due to last week’s geopolitical tensions.

“The increased geopolitical tensions this week, centred on the Korean peninsula and the nearby US territory of Guam, have caused stock markets around the world to fall back as investors turn cautious. As is often the case in such circumstances, many have looked for assets that are seen as less risky, one of which is gold. The precious metal enjoyed a 2.2% rise to $1292 per ounce, close to its high for the year.

“For investors who want exposure to gold and gold miners we would highlight African mining group Randgold Resources as our preferred option. The company has been fairly consistent in increasing production and said recently that it expected to achieve the top end of its production guidance for 2017. Randgold is producing record amounts of gold each quarter and its transition from contract mining to owning its mining assets should help improve efficiencies and lower operating costs. Recent second quarter figures were strong with profits rising 21% to the end of June, and the gold price has risen since then. This is a share for investors looking for capital growth and willing to accept a higher level of risk.”