3 Gold Miners That Stand to Sparkle from Growing Demand

Trillions and trillions of new paper is flooding Wall Street. While it’s working to stabilize world markets in the short term, it will result in longer-term debasement of paper currencies. And it’s making gold the place to be right now.

Here’s the interesting thing. Gold is normally a hedge against inflation and financial catastrophe, but it’s really not acting out its part very well. Gold stores are up. Investors are so preoccupied with the financial meltdown and the short-term weakness in the economy, that they’re ignoring the coming inflation.

Gold has moved up a little over the past few weeks, but it pulled back Tuesday and gold stocks have been hammered mercilessly. This is partly due to the drop in commodity prices that has negatively impacted gold shares.

Now is a great time to establish a position in undervalued, low-cost producers of gold.

The currency markets can’t be trusted to reflect the true nature of this reinflation and currency debasement. The reason is simple - all the major currencies - yen, dollar, euro and pound - are inflating in unison, so it’s not just more dollars out there. There are trillions of new pounds, euros and yen as well.

Yamana Gold (AUY), Kinross Gold (KGC) and Agnico-Eagle Mines (AEM) should all benefit from growing gold demand. And if inflation does start to rear its ugly head again, gold should be the place to be.

Comments

[silverwood:]

Yes, I agree with the author's stocks picks and there are others that should do equally as well. GG, IAG. PAAS and GBG to name a few. All the gold/silver miners were sold off severely. The fundamentals are improving for gold/silver and taking a longer term view this appears to be a good entry point to accumulate said stocks.

Jan 01 09:18 AM

[arlin:]

This article is about 8 weeks too late;
AUY,AEM,KGC were all half their current value,and are now due a pullback.

Jan 01 09:48 AM

[Robert Cassidy:]

Yes , the Gold mining stocks were cheaper , in fact grossly oversold , but at current levels are attractive , with most of the upside potential yet to be realized due to global explosion in fiat currency expansion...The Us dollar price of gold more so than most other major currencies will be impacted in the coming year by these inflationary fundamentals..The risk reward ratio favors gokd.........bocacassi...


On Jan 01 09:48 AM arlin wrote:

> This article is about 8 weeks too late;
> AUY,AEM,KGC were all half their current value,and are now due a pullback.

Jan 01 12:18 PM

[dionysos:]

I agree that this article is late to the game, but there is still plenty of money to be made on gold and silver stocks. Id add to the list SLW as a pure silver play and GDX the basket of large to medium miners. After the producers have run for a while, the juniors can come back dramatically. The gold train has not left the station yet and there is still time to get aboard. Gold miners might stall at 920 resistance in spot gold and that could be a great buying opportunity.

Jan 01 01:17 PM

[120 wallace:]

That counts as an article? My 9 year old could write a more interesting account of the gold stocks. Seems more like a tout sheet.

Jan 01 04:51 PM

[1977°C:]

If somebody is bullish on some stocks forever in the same industry, I ask, can we trust such an analyst at all times?
Everything has it's place in time, any stock has it's up/down trend so why to bother with Gold stocks when there are many other opportunities, what is the difference between this 3 stocks going up in your opinion and 3 stocks in any other industry that will go down and can be shorted.
Today word BUY in most stocks more and more means "DIE" as almost everything goes down like hell.

Jan 01 08:09 PM

[RBSTOCKS:]

All I can say is WOW!
First off I really believe that if you write and article, however you define "Article", you should not be pushing and stock, maybe a sector, but not a specific stock. It seems to me that when you push a stock or two or three, it is because you have stake in it and hope to drive up the price thru someone else’s excitement. Yes I do believe that the mining sector in gold and silver and several other minerals’ are ready to start a move back up after a sharp correction, but I will not call out any one stock over another. The likely hood that I or anyone that writes articles here would pick wisely for you is like throwing darts 20 feet at a wall of stocks on post it notes. I do agree with one post that this article is a bit late, but historically AUY tends to jump ahead of the game, I do not follow the other two listed. Perhaps they are an indication that these sectors are about to move as a whole. I for one stick to charts for most of my decision making processes for buying or selling a stock, and could list many miners that appear to have bottomed and are beginning to move again, but as I stated it is not my place to push anyone to buy anything.

Jan 01 08:47 PM

[auto44:]

It seems to me that if gold is rising in price that it would be more efficient to buy a gold etf such as gld. You don't have the worries of the risks of trying run a profitable company. Isn't gold that is out of the ground worth more than gold in the ground?

Jan 02 01:12 AM

[Dellmsft:]

" and gold stocks have been hammered mercilessly" - Really? AEM is as close to it's 52 WK. high as it is to it's low. Seriously, was this article written six weeks ago and just posted now?

Jan 02 08:58 AM

[RBSTOCKS:]

auto44, this is true, however for someone who may have limited funds but would like have a chance of great returns, mining stocks are sometimes the way to go. GLD runs at about 1/10 of true gold price, so one could buy alot more of that etf then they could the metal, lowering their risk but not really raising their reward target very much. I guess that depends on the type of trader that you are, and I will not even try to tell someone what to trade.


On Jan 02 01:12 AM auto44 wrote:

> It seems to me that if gold is rising in price that it would be more
> efficient to buy a gold etf such as gld. You don't have the worries
> of the risks of trying run a profitable company. Isn't gold that
> is out of the ground worth more than gold in the ground?

Jan 02 09:01 AM

[otbricki:]

Another gold pumper.

Here is a clue. The money being pumped into the banks by the treasury is going right into a rathole of deflation and deleveraging. The Bank of Japan did the same thing in the '80s and the result was not rampant inflation at all.

Jan 02 10:40 AM

[katec:]

Normally, there are rules that if someone owns the stock that is writing a report on a certain sector which includes that stock, they are required to inform the readers. However, I do not know what the rules are on Seeking Alpha and their articles authors. This gives you an idea that you can research prior to investing anyh of his suggestions!


On Jan 01 08:47 PM RBSTOCKS wrote:

> All I can say is WOW!
> First off I really believe that if you write and article, however
> you define "Article", you should not be pushing and stock, maybe
> a sector, but not a specific stock. It seems to me that when you
> push a stock or two or three, it is because you have stake in it
> and hope to drive up the price thru someone else’s excitement. Yes
> I do believe that the mining sector in gold and silver and several
> other minerals’ are ready to start a move back up after a sharp correction,
> but I will not call out any one stock over another. The likely hood
> that I or anyone that writes articles here would pick wisely for
> you is like throwing darts 20 feet at a wall of stocks on post it
> notes. I do agree with one post that this article is a bit late,
> but historically AUY tends to jump ahead of the game, I do not follow
> the other two listed. Perhaps they are an indication that these sectors
> are about to move as a whole. I for one stick to charts for most
> of my decision making processes for buying or selling a stock, and
> could list many miners that appear to have bottomed and are beginning
> to move again, but as I stated it is not my place to push anyone
> to buy anything.

Jan 02 12:20 PM