Gold Is Surging: Is Royal Gold (RGLD) the Best Way to Profit?

Gold has been on a remarkable run, with 2024 marking its best performance in over a decade. The precious metal's surge can be attributed to a confluence of factors, including increased buying by big investors and central banks, falling interest rates, and a weaker US dollar. But the real driver behind gold's strong performance? Rising market uncertainty and geopolitical tensions have made gold a go-to safe haven for investors.

Adrian Ash, research director at BullionVault, joined CNBC on January 6, 2025, and discussed gold’s importance as a safe-haven asset during uncertain times: “Investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt.” This sentiment underscores the continued demand for gold as a safe-haven asset.

JPMorgan analysts believe gold prices could rise further, especially if American policies become more unpredictable with higher tariffs, trade disputes, and economic instability. Both BullionVault and JPMorgan expect gold to hit $3,000 per ounce in 2025. Silver may also see gains due to robust demand in solar panels, electronics, and AI technology, though its growth depends on global industrial demand. Meanwhile, copper prices may cool after recent highs, and iron ore could face declines due to oversupply linked to Chinese policies and geopolitics.

On February 18, 2025, Goldman Sachs raised its gold price prediction for the end of 2025 to $3,100 per ounce, up from $2,890, mainly because central banks are consistently buying more gold. They believe this strong demand, combined with more investment in gold ETFs as interest rates decline, will push prices higher. If global trade tensions continue, gold could soar even higher, possibly reaching $3,300 per ounce as investors seek safety. However, if the Federal Reserve keeps interest rates steady instead of slashing them, gold might settle at around $3,060 per ounce. Despite this, Goldman is sticking with its “Go for Gold” strategy, saying gold is still a smart investment to protect against risks like economic slowdowns, trade disputes, and rising US debt concerns.

Given this bullish outlook on gold, investors might be wondering how to best capitalize on the trend. One option is to buy gold dividend stocks, which offer the potential for both capital appreciation and steady income. Royal Gold, Inc. (NASDAQ:RGLD) is one such stock that has caught the attention of analysts.

Royal Gold is a precious metals streaming and royalty company, which means it provides financing to mining companies in exchange for the right to purchase a portion of their future production at a fixed price. This business model allows Royal Gold to benefit from rising gold prices without the operational risks associated with mining.



The company has a strong track record of dividend growth, with a current yield of around 1.5%. While this may not seem high compared to other dividend stocks, it's important to note that Royal Gold's dividend is backed by the strong cash flows generated from its streaming and royalty agreements. As gold prices continue to rise, so too should Royal Gold's cash flows and, by extension, its dividend.

However, investing in gold dividend stocks like Royal Gold is not without risks. The price of gold is notoriously volatile, and there's no guarantee that it will continue to rise. Additionally, Royal Gold's business model exposes it to the risks associated with the mining industry, such as operational disruptions and regulatory changes.

That being said, the current geopolitical climate and market uncertainty suggest that gold's safe-haven appeal is likely to endure. As such, gold dividend stocks like Royal Gold could be a smart way to profit from the trend while also generating steady income. As always, investors should do their own research and consider their risk tolerance before making any investment decisions.