Hedging by Australia's Pension Funds Set to Boost Local Dollar
Tariff risks and bets that the Federal Reserve will cut interest rates should weaken the greenback, according to Ray Attrill, head of foreign-exchange strategy at National Australian Bank in Sydney. Aussie pension funds may then have to increase currency hedging for their US assets, he said.
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Written by Demetris Afxentiou at The Motley Fool Canada When market volatility hits, seasoned investors often turn towards the perceived safety of precious metals. That presents an opportunity for those investors to benefit from surging gold prices. Here's a look at some of the ways you can benefit from those surging gold prices without being exposed to significant risk. Opportunities are growing Economic uncertainty leads to surging gold prices. It's no coincidence, then, that gold prices are up an astonishing 26% year-to-date to over US$3,330 per ounce. This presents an opportunity for investors to consider because of those surging gold prices. Two options for investors to consider right now are Wheaton Precious Metals (TSX:WPM) and Barrick Mining Corporation (TSX:ABX). Both of these stocks can offer a different take on how to benefit from the current gold rally we're seeing unfold. Meet Barrick Barrick is a traditional miner and one of the largest gold miners on the planet. The company has a well-diversified portfolio of 18 active mines on four continents. Barrick also boasts a number of projects currently under exploration and development. Traditional miners like Barrick earn profits by selling off the precious metals produced from their mines. The cost of mining is largely fixed, whereas the price at which those extracted metals sell is based on the market. In other words, as gold prices rise, Barrick becomes more profitable. That's a key reason why Barrick is a great option for investors looking to benefit from surging gold prices. By extension, it's also the reason why Barrick's stock price has soared a whopping 32% this year. In fact, in the most recent quarter, Barrick posted an incredible 59% increase in net earnings when compared to the prior year. The company also reported free cash flow of $375 million in the quarter. That stellar performance helped Barrick trim 5% of its net debt in the quarter. Prospective investors looking at Barrick should also note that the company offers a quarterly dividend. As of the time of writing, the yield on that dividend works out to 1.9%. Meet Wheaton While Barrick provides the direct operational upside, Wheaton provides an alternative, lower-risk option for investors. Part of the reason for that is because Wheaton is a precious metals streamer. Streamers like Wheaton do not own or operate precious metal mines. Instead, they provide upfront capital to traditional miners, who will then set up the mine and begin operations. In exchange for that upfront capital, streamers are permitted to purchase an amount of the metals that are produced from the mine at discounted rates. Let's clarify that further – streamers purchase those metals at extremely discounted rates. As mentioned above, the spot price for gold currently sits just over US$3,3300 per ounce. For silver, the market price is US$38 per ounce. The price that streamers like Wheaton pay for an ounce of gold sits near US$450 per ounce. Turning to silver, that number is near US$4.00 per ounce. In other words, Wheaton benefits from the market rally like Barrick, but has the bonus of considerably lower risk. And like Barrick, Wheaton also pays out a quarterly dividend, although its dividend currently sits at a yield of 0.7%. That being said, prospective investors should note two key points about Wheaton's dividend. First, the dividend is based on the average operating cash flow from the prior four quarters. This means that investors can expect a bump if the current surge continues. Second, the dividend is well supported, with a payout ratio of just 33% of cash flow. Again, this leaves room for growth. Will you benefit from surging gold prices? No stock is without risk. Both Wheaton and Barrick offer investors a unique opportunity to buy into the surging precious metals market. In my opinion, a small position in one or both of these stocks would do well in any larger, well-diversified portfolio. The post Investors: How to Benefit From Surging Gold Prices appeared first on The Motley Fool Canada. Should you invest $1,000 in Barrick Gold right now? Before you buy stock in Barrick Gold, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Barrick Gold wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading 10 Stocks Every Canadian Should Own in 2025 3 Canadian Companies Powering the AI Revolution A Commonsense Cash Back Credit Card We Love Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025
