Here's My Favorite Gold Investment With Its Price Down to $4,000 an Ounce

Newmont (NYSE: NEM) is the world's largest gold producer and one of the best ways to invest in the idea that gold prices will rise. The key to the investment case is that investors are taking on commodity-specific risk by buying gold-related stocks, so it makes sense to buy a company with relatively low stock-specific risk.

The company's rock-solid balance sheet, disciplined capital allocation approach, strong reserves, and refocusing on its core gold and copper assets give investors that security.

Newmont

As many gold investors know, the price of gold has surged in recent years, trading at around $1,800 per ounce five years ago, then just shy of $4,000 per ounce right now, having reached more than $5,200 per ounce along the way.

Naturally, that increase has led to sharply higher revenue, profitability, and cash flow for gold miners, and the good news is that Newmont has used it to pay down debt and create a fortress balance sheet. The chart below shows the increase in earnings before interest, taxation, depreciation, and amortization (EBITDA) and the reduction in net debt. The negative number in 2025 reflects net cash of $2,058 million on the balance sheet.

Data source: S&P Global Market Intelligence. Chart by the author.

A disciplined capital allocation plan

History suggests the price of gold will be volatile, and that matters even if you are a long-term bull. Consequently, it's important for miners to manage risk through the potential volatility in the precious commodity's price. Newmont is doing this via a capital allocation approach that prioritizes paying its $1.1 billion annual dividend and sustaining capital spending (targeted at $1.95 billion in 2026).

Only after this use of cash are resources allocated to development capital (management targets $1.4 billion in 2026) and share buybacks (Newmont has $6 billion in authorization). The idea is to provide high income security for investors through dividends while maintaining investment in its assets.

Moreover, on the operational side, Newmont's management divested six non-core assets in 2025 , with the aim of focusing its investments on its top-tier mines, notably in Australia (Cadia and Tanami) and Ghana (Ahafo North). It's a strategy aimed at concentrating production in its core mines, which will hopefully result in lower cash costs per ounce.

Image source: Getty Images.

A stock to buy?

As recently argued, the long-term outlook for gold remains bullish, even as near-term pressures from a correction in investment demand have sent the price lower. Still, the underlying fundamentals and appeal of gold as a hedge against rising debt levels, geopolitical uncertainty, and the increasing willingness of central banks to prioritize buying gold over U.S. debt appear to be a structural multi-year shift.

Lee Samaha 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.