These Gold-Mining Stocks Win as Central Banks Buy Gold

The world is in the grips of a gold rush – but this time, it isn't prospectors going panning in riverbeds.

Instead, it's central bankers stacking up riches in vaults...

During each of the past three years, central banks have snapped up more than 1,000 tonnes of the metal. And they're not slowing down.

In the last quarter alone, India's central bank bought 3 tonnes of gold... the Czech Republic bought 5... Kazakhstan bought 6... China bought 12... and Poland's central bank added about 48 tonnes to its gold pile.

All this buying has caused gold to skyrocket 86% in the past three years. It reached an unprecedented $3,500 per ounce this April.

With so much momentum behind gold, this is a great moment to own the metal. But it might be an even better time to own gold streaming companies.

Let me explain...

How to Bet On a Gold Boom

It's one of the best business models on Earth...

Imagine you own a gold mine, chock-full of precious metals. What you lack is a mining operation...

But you don't want to start one, either. After all, mining gold is dangerous, laborious, and expensive.

So you get another idea... You license your mine to other operators. And in exchange, you get a discount on whatever they pull out of the ground. In other words, you get a "stream" of gold with zero operating risk.

That's the genius behind gold streamers. It's a bulletproof business model when gold is rallying like it is today.

In fact, gold's bull run drew a major new player into the streaming market last month... Zijin Mining (ZIJMF).

Zijin is China's biggest mining company, and it's the fastest-growing miner in the world.

Zijin already has the risky mining operation. And it has grown that business model into a behemoth worth $70 billion.

But now, with the metal soaring, Zijin is boosting its gold exposure... by entering the streaming game.

Zijin is the first Chinese mining company to make the leap to streaming. (Most streamers are Canadian.) It's seeking deals in Africa and South America worth between $200 million and $400 million this year.

These guys know mining. And despite gold being near all-time highs, Zijin is finding new ways to add to its gold reserve. As one director of a Zijin subsidiary told the Financial Times, "We are really bullish on gold prices."

If you aren't already, you want to be long gold today. And for some added leverage to the gold rally, you should consider owning a streamer as well.

Zijin's recent pivot makes this a great entry point for the Chinese upstart. But you might also want to consider other gold streamers like Franco-Nevada (FNV), Wheaton Precious Metals (WPM), and Royal Gold (RGLD).

Zijin is making a big bet that gold will keep rising in the future. And with central banks all betting that way as well, $3,500-per-ounce gold is likely just the beginning.

Add gold exposure to your portfolio today.

Good investing,

Sean Michael Cummings

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