Is it time to hunker down and stockpile gold?

Gold is one of the best-performing assets so far this year. Concerns about the health of the global economy, rising debt levels around the world and instability in financial markets have sent investors scrambling towards the yellow metal. The price of gold is up around 20% year-to-date.

Investors buy gold during times of market panic as it's generally perceived to be a safe haven. But whether or not gold is a great buy for most investors is a topic that remains up for debate.

On one hand, the price of gold tends to rise during times of instability and has proven itself to be an excellent hedge against inflation. However, on the other hand, gold costs money to store, doesn't generate an income and prices can be extremely unpredictable.

Share prices are also unpredictable, yet the big advantage of owning equities is that they often pay a regular dividend to investors. As a commodity, gold doesn't offer the same kind of income.

So, if you think it's time to buy gold as uncertainty prevails, it might be better to buy the shares of gold miners, which offer both exposure to the gold price and a dividend yield. According to the financial press, this is exactly what legendary investor George Soros has been doing over the past six months as he looks to protect his portfolio from any sudden market shocks and global economic instability.

The best of the best

Centamin(LSE: CEY) and Randgold Resources (LSE: RRS) are possibly the two best miners to play this trend.

Randgold is one of the best-managed miners in the world, and the company could be the perfect play on the gold price.

Randgold has AISC (all-in sustaining costs) of $797 per ounce and analysts at Bank of America believe that a 5% move in the gold price could boost the company's earnings before interest tax depreciation and amortisation by as much as 12%.

The company will only take on projects with a 20% internal rate of return based on a gold price of $1,000 per ounce. This strict investment policy means the miner hasn't commissioned expensive projects and has a cash-rich balance sheet.

Randgold's shares currently trade at a forward P/E of 34.2 and support a token dividend yield of 0.7%.

At the end of Q1, Centamin reported that it was debt-free and unhedged with cash, bullion on hand, gold sales receivable and available-for-sale financial assets of $230.7m, up around 50% year-on-year.

What's more, the company's AISC are set to fall to $900 per ounce this year. Gold production at the firm's flagship Sukari mine in Egypt increased by 6.5% during the first quarter to a record 125,268 ounces. This increase means the company is now well on its way to hitting its targeted production of 470,000 ounces this year.

Shares in Centamin currently trade at a forward PE of 12.2 and support a dividend yield of 2%.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.