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The gold price premium may begin to cool, especially as geopolitical conflicts begin to cool as countries prepare for a new United States administration. That’s why the price of gold has fluctuated and struggled to break above $2,700 an ounce, making other discounted commodities like crude oil a better buy when viewed from a risk-reward perspective.

In the energy sector, many stocks could use a boost as their prices are at their lowest levels today. At the same time, some exchange-traded funds (ETFs) in both gold and oil are worth rotating portfolios now, in addition to considering some of the stocks on today’s list as potential buys and sells in the same process.

ETFs such as US Oil Fund NYSEARCA: USAGE could be a great buy right now, especially since the second week of December 2024 will start with growth of 2.3%. Meanwhile, Gold Shares SPDR NYSEARCA:GLD up just 1.4% and struggling to continue the breakout that makes names like Barrick Gold Company New York Stock Exchange: GOLD from which you should consider removing chips, and oil names such as Transocean LLC. NYSE: INSTALLATION With Exxon Mobil Company. New York Stock Exchange: gold buy instead.

Why the Gold Award could disappear in the coming months

Over the past few quarters, gold prices have continued to rise due to concerns about trade tariffs and the potential inflationary impact they could have on the United States economy. Adding to this view was the so-called “war premium”, given the wider flight to safety caused by conflicts in the Middle East.

Now, as the new US administration works to ease these conflicts, gold prices have retreated from previous highs and will begin to rise sharply in the second week of December 2024, when Syria overthrows its government. However, overall the situation looks much cooler than a couple of quarters ago, so gold is not breaking resistance.

Moreover, Bloomberg reported that gold sales have fallen sharply in China and India, the world’s two largest retail gold markets, which act as a leading indicator of how the general public perceives gold.

This could be why investors could see FMR LLC members reduce their holdings in Barrick Gold by 16.6% as of November 2024, as well as $2.5 billion in net institutional outflows from the gold miner.

While it may be premature to exit gold, there is a way for investors to hedge their position by combining a short position in gold with a long position in silver. The SPDR Gold Shares ETF is seeing the same trend in institutional sentiment.

As of November 2024, Toronto Dominion Bank and Barclays have reduced their holdings in the SPDR Gold Shares ETF by 16.7% and 42.7%, respectively. Opinions are changing on many levels, and investors should be aware that as tensions ease and retail demand for gold declines, prices are at risk of a major pullback in the coming months.

Oil prices offer a superior risk-reward profile for these energy companies

With oil prices remaining strong at $69 a barrel, investors are now back to the point where markets will decide whether the bulls or bears will control commodities.

Compared to gold prices, oil has much greater upside potential with much less risk, probably a dollar or two at risk at the moment.

Buying a US Oil ETF is one thing; investors will likely get 1-for-1 as long as oil prices rise, and that’s fine. However, stocks higher up the value chain offer much greater growth potential for those looking to add value to their portfolios.

Such an action could be the Transocean company, which leases equipment to oil producers and explorers.

As for earnings, he will be paid the most and first.

That’s why Susquehanna analysts have reiterated their positive ratings on Transocean shares and also set a $6.50 price target for the company’s stock, putting it at 62.5% of today’s prices.

Considering the stock has a high beta of 2.7 today, the volatility may be too much for investors to handle, and that’s where Exxon Mobil stock comes into play.

With a much lower beta of 0.9 and still double-digit growth potential, this $502 billion oil giant is a happy medium between Transocean and an ETF.

Morgan Stanley believes Exxon Mobil shares will hit a high of $140 per share, suggesting upside potential of 23% from today’s share price.

Other sensor This trend can be seen in the company’s short interest decreasing by 7.9%, indicating signs of bearish capitulation in the face of these bullish trends for oil companies. stock.

Before you consider Barrick Gold, you should hear this.

MarketBeat tracks Wall Street’s top-rated and best-performing analysts daily and the stocks they recommend to their clients. MarketBeat identified five stocks that top analysts were quietly telling their clients to buy now, before the broader market caught on… and Barrick Gold wasn’t on the list.

While Barrick Gold currently has a Moderate Buy rating among analysts, the top-rated analysts think these five stocks are Strong Buys.

View five stocks here

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