What happened

Shares of giant gold miner Barrick Gold (GOLD -5.12%) surged 50% over the first six months of 2020, according to data from S&P Global Market Intelligence. The broader market, as measured by the S&P 500 index, was down roughly 5% over the same span. Clearly, investors saw something in Barrick that was exceptional ... sort of.

So what

Barrick is one of the world's largest gold miners. It's top and bottom lines are tightly tied to the metal's performance. Gold, a precious metal, is often considered a store of wealth during turbulent times. So, when investors are a bit skittish, they often start buying the yellow metal. That's pretty much what happened in the first half of 2020, as fears surrounding the spread of COVID-19 had investors on edge. To put a number on that, SPDR Gold Shares, which buys physical gold, was up around 17% over the first six months of the year.

A gold miner holding up a gold nugget

Image source: Getty Images.

Barrick has benefited from the increase in the price of the metal. As the material the miner pulls from the ground rises in price, the company's margins expand because its costs remain relatively constant. That helps explain why the stock rose so much more than the actual metal. The interesting thing here is that, after a brief bear market, the broader stock market has again soared toward all-time highs. So both gold (and Barrick) and the stock market have been running hot of late. It's a worrying sign, since investor sentiment is what's driving both. If history is any guide, investors in one or the other are missing something. 

Now what

The gains in gold and Barrick's stock suggest that at least some investors are worried that COVID-19 is a bigger issue than investors more broadly seem to think, based on the quick rebound of the S&P 500 index. It's too soon to tell if that's right or not, but adding a little gold for diversification purposes isn't a terrible idea if the market's swift rebound has you on edge. That said, Barrick is only one way to do that; investors looking to diversify should consider more options, including streaming companies.