Seeking Alpha

Gold miner stock rally has just begun, some analysts say

  • Gold miners already have recouped YTD more than a third of what they lost last year, and basic materials investor Malcolm Gissen thinks the rally may have a lot more room to run.
  • The co-manager of the Encompass Fund says it’s a great time to invest in gold miners; there’s a jump in merger activities in the sector as well as hostile takeover attempts, which be a sign that higher gold prices are ahead.
  • Adam Koos of Libertas Wealth Management prefers to wait to see a base creation and then breakout above bearish resistance lines and moving averages; when that happens, he likes AuRico Gold (AUQ) and Franco-Nevada (FNV).
  • Gissen suggests investors dip a toe in the water by buying some of the growing intermediate producers such as Primero Mining (PPP); among the larger producers, Goldcorp (GG) looks most attractive because of the projects it has and the cash flow it will generate this year.
  • ETFs: GDX, GDXJ, NUGT, DUST, GLDX, JNUG, RING, GGGG, JDST, PSAU
Comments (8)
  • harkvasa
    , contributor
    Comments (72) | Send Message
     
    I like NUGT.
    With Gold prices and gold miners recovering in 2014, NUGT which trades at around $50 could go to $250 sometime in 2014.
    21 Feb, 11:24 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    Three months ago gold was supposedly heading to $800 and the miners were a fool's bet.

     

    How quickly they change their tune!
    21 Feb, 12:37 PM Reply Like
  • bridge
    , contributor
    Comments (267) | Send Message
     
    "How quickly they change their tune!" Yes, its called adapting to market conditions. And a year ago people were saying gold is going to $5,000!!!!! But that didn't happen did it and instead we had a MAJOR SELLOFF. That's how the market works. There are no guarantees. And there are always reversals.

     

    Analysts looking at the gold market see a base forming off a major correction and so some are predicting a bounce off that low... Its a good thesis. I'm certainly onboard.

     

    And don't forget, only 6 months ago, gold miners were a fool's bet. You'd still be underwater.
    21 Feb, 01:04 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    bridge,

     

    No it called "how quickly they change their tune".

     

    These fund "analysts" are simply looking at the trend and conjuring up a BS "analysis" to explain it and why its going to continue.

     

    That is how they make their bread. It is the same for ALL equities and sectors and it is a load of horsesh--!

     

    Only the contrarians have any guts. I'd respect a fund manager talking about why he or she wouldn't touch the social media space here even though the sector is booming.

     

    That would be an example of actionable intelligence.
    22 Feb, 10:22 AM Reply Like
  • Johnny b 1889
    , contributor
    Comments (20) | Send Message
     
    Gold has already hit a double bottom @ 1200 from July 2013 and. Jan 2014 . Gold has been in a bear market for over 3 years ! I see gold going to 1450
    21 Feb, 03:21 PM Reply Like
  • Jason Burack
    , contributor
    Comments (1760) | Send Message
     
    Almost no primary gold miner on the planet could produce gold at an all in cost below $1000. Only about 25% of all primary gold miners can produce around $1,200/oz. Some miners had a mine here or there that could buy even the ones with a very low cost mine would have had to shut down many operating mines in their portfolios. Demand for physical metal is clearly still increasing globally especially from China and Indian demand has stayed pretty strong at over 900 tons/year despite their government's attempt at stopping imports with stupid policies and higher import taxes. I just interviewed Alex Stanczyk about this. He helps secure and store physical metal for hedge funds, institutions and high net worth individuals and high net worth families. Please listen to the podcast!
    21 Feb, 03:46 PM Reply Like
  • metalfarmer
    , contributor
    Comment (1) | Send Message
     
    LSG can produce at all in costs below $1000 and is up 150% in three months :)
    22 Feb, 08:19 AM Reply Like
  • primus66
    , contributor
    Comment (1) | Send Message
     
    Very few mines can produce under $1000/OZ. But those will be the ones that are going to have a long mine life.
    23 Feb, 09:28 AM Reply Like
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