Goldcorp, Yamana Gold offer less risk among miners, Barclays says

|By:, SA News Editor

Finding safety in gold miners (GDX) seems like an oxymoron these days, but Barclays believes some in the group offer “downside protection" if the price of gold doesn’t fluctuate too much in 2014.

Barclays believes reduced volatility in gold prices will allow for more certainty in making investment decisions regarding gold equities, which should benefit the sector given it is broadly under-owned; also, North American producers are poised to reduce operating costs on average vs. 2013, which should increase producers’ operating leverage to the gold price.

When capital begins to flow back into the sector, the firm thinks some investors will favor gold companies that offer protection from lower gold prices or leverage to flat gold prices.

Barclays names Goldcorp (GG) and Yamana Gold (AUY) as companies with strong production growth, falling costs, declining capital obligations and less debt than competitors.