Gold (GLD) continued its hot streak as investors turned to it as a safe haven. Despite losing its use to back a country’s currency, markets still want protection against inflation, geopolitical tensions, tariffs, and a hedge on stocks.
Gold will increase in value as the trade war against the U.S. worsens throughout this year. Countries need to accumulate gold to offset a decline in their currency.
Investors may also consider gold miners (GDX). GDX stock is up 21% YTD, thanks to mining stocks bouncing back. Newmont (NEM) and Barrick Gold are up sharply from their lows reached in December 2024.
Oil stocks are out of favor. WTI crude prices have trouble attracting investors. Sentiment for crude oil worsened on Feb. 5, after crude and gasoline stockpiles increased. The tariff delay against Canada and Mexico hurt the price of oil. Looking ahead, The trade war between the U.S. and China will only get worse. After the countries impose tariffs against each other, oil demand will fall.
The Middle East is not cutting oil production, hurting oil markets further. Investors may consider Exxon Mobil (XOM), Devon Energy (DVN), ConocoPhillips (COP), and Chevron (CVX). Occidental Petroleum (OXY) is especially good value. Warren Buffett’s Berkshire Hathaway (BRK-B) holds a big position in OXY stock.
Eventually, oil prices will recover as markets adjust for the impact of tariffs on world trade.
