There always have been the hardcore gold bug investors and Wall Street analysts who tout the precious metal constantly and stay very overweight regardless of demand and the macro picture. The bottom line is that, from an asset allocation standpoint, all structured portfolios need a weighting to precious metals between 3% and 5%. However, there are times when investors should overweight gold, and now is looking more and more to be one of those times.

When you combine the geopolitical witches’ brew of the trade issues with China, the rising tensions with Iran and the belligerence of the political cycle starting to reenter the news cycle in a big way, you have all the ingredients for gold to surge even more.

RBC analysts think there is a 40% chance that gold, which recently closed at record highs at $2,041 per ounce, could hit $3,000 by the first quarter of next year. BofA Securities also believes that gold could hit that mark. If you toss in the rampant printing of money, dollar weakness and the overall nervousness from the COVID-19 pandemic and the civil unrest in major U.S. cities, all the factors are in place for a continued move higher.

Here is what BofA Securities said when it raised its target on gold:

Gold has rallied as real rates have fallen. Continued fiscal spending as governments are mending the damage from Covid-19, backstopped by central banks means that interest rates will remain low, at the same time as the economy reflates. We reinforce our $3,000 per ounce target. This is very supportive for gold. With the US elections scheduled for November and the EU’s Recovery fund in place from January 2021, we expect demand to remain supported also next year.

The SPDR Gold Shares ETF (NYSEARCA: GLD) broke out of a six-year trading range last September and hasn’t looked back since, hitting a new all-time high this week. Top technical gurus feel that the long sideways move was part of the impetus for a big price breakout, and with huge demand pouring in for physical gold all over the world, tight supplies could get even tighter. This is the investment vehicle of choice for many investors looking to have physical gold holdings.

BofA Securities raised price targets on many gold stocks it has rated Buy. Here we focus on four top miners, and one of the best royalty companies, in which the analysts increased their targets the most.

Agnico Eagle Mines

This is one of Wall Street’s most preferred North American gold producers. Agnico Eagle Mines Ltd. (NYSE: AEM) is a senior Canadian gold mining company that has produced precious metals since 1957. Its eight mines are located in Canada, Finland and Mexico, with exploration and development activities in each of these regions, as well as in the United States and Sweden.

The company and its shareholders have full exposure to gold prices due to its long-standing policy of no forward gold sales. Agnico Eagle has declared a cash dividend every year since 1983.

BofA Securities loves the stock and noted this recently when the company posted solid second-quarter results:

For the second quarter of 2020 the company reported adjusted earnings per share of $0.18, just above consensus of $0.17. We attribute the beat to a lower tax rate. For 2020, Agnico Eagle tightened upwards its production range from 1.63-1.73 million ounces to 1.68-1.73 million ounces. Costs were unchanged. Based on sector wide multiple expansion, we raised our target multiple from 2.25 to 2.50 times net asset value.

Shareholders receive just a 0.96% dividend. The BofA Securities price target was lifted to $90 from $80, and the Wall Street consensus target is $77.77. Agnico Eagle Mines stock closed trading Wednesday at $83.51.

B2Gold

This is a small-cap gold stock for aggressive investors looking for sector exposure. B2Gold Corp. (NYSE: BTG) is a global, growth-oriented mid-tier gold producer whose primary assets include gold mines located in Nicaragua (La Libertad and El Limon), the Philippines (Masbate) and Namibia (Otjikoto) and Mali (Fekola).

B2Gold recently announced positive drill results from the Mamba zone, which is located within the Anaconda area approximately 20 kilometers from the Fekola Mine, as well as positive infill drill results from the Fekola mineral resource area and step out results north of the Fekola resource.

BofA Securities raised its $6.40 price target to $8.50, way above the $3.50 consensus target. B2Gold stock ended Wednesday at $7.37.

This stock has surged off the March lows and looks poised to move even higher. Eldorado Gold Corp. (NYSE: EGO) engages in the exploration, discovery, acquisition, financing, development, production, sale and reclamation of mineral products, primarily in Turkey, Canada, Greece, Brazil and Romania.

The company primarily produces gold, as well as silver, lead, zinc and iron ore. It operates five mines. Kisladag and Efemcukuru are located in western Turkey, Lamaque in Canada, and Olympias and Stratoni located in northern Greece.

The $13 BofA Securities price objective was raised to $15. The posted consensus target of $1.98 is questionable, given that Eldorado Gold stock closed at $10.05 on Wednesday.

Kinross Gold

Investors who are more aggressive may want to consider this smaller cap mining company. Kinross Gold Corp. (NYSE: KGC) engages in the acquisition, exploration and development of gold properties, principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.

Kinross Gold is also involved in the extraction and processing of gold-containing ores, reclamation of gold-mining properties and the production and sale of silver. As of December 31, 2019, its proven and probable mineral reserves included approximately 24.3 million ounces of gold and 55.7 million ounces of silver.

BofA Securities has a new $15 price target, up from $8.90. The consensus target is $9.80, and Wednesday saw a closing price of $12.71 for Kinross Gold stock.

Wheaton Precious Metals

This precious metals royalty stock makes good sense for more conservative accounts looking to have exposure to the sector. Wheaton Precious Metals Corp. (NYSE: WPM) is a Canadian precious metals streaming company with approximately 60% of its revenues from the sale of silver and 40% from gold.

Under the terms of long-term contracts, the company purchases silver and gold from a variety of mines, including Goldcorp’s Penasquito mine in Mexico, Vale’s Salobo mine in Brazil, the Lundin Mining Zinkgruvan mine in Sweden, and Glencore’s Antamina and Yauliyacu mines in Peru, then sells the silver and gold into the open market.

Last December the company announced it had reached a favorable settlement with the Canada Revenue Agency with respect to the 2005 to 2010 tax years. Wheaton now anticipates that there will be no additional cash taxes for those years for its international subsidiary. This tax case had depressed the valuation and should help the shares continue to move higher.

Holders of Wheaton Precious Metals stock receive a 0.71% dividend. The BofA Securities price target jumped from $47.00 to a whopping $64.50. The consensus target is down at $51, below Wednesday’s close at $56.21 a share.

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As we mentioned at the beginning of this post, proper asset allocation should always include at least a single-digit percentage holding of precious metals like gold and silver. Not only do they hedge inflation over the long term, but they really can help if the market goes into correction or bear market mode, as they tend to trade inverse to markets.

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