Skip to footer

Gold prices high. But gold stocks a bargain.

Gold prices are still hovering near record territory, but gold mining stocks are at one-year lows. Expecting gold prices to rise, some analysts see gold stocks as a buy. 

|
Lisi Niesner/Reuters/File
An employee picks up a gold bar at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna this past August. Although gold prices are near record territory, gold mining stocks are hitting 52-week lows.

While gold prices are not far from the highs of last September, gold stocks are hitting 52-week lows. So why choose gold stocks over the real thing?  
Right now, they’re a bargain, said Patrick Chidley, mining analyst for HSBC.

 “Mining companies have been expanding their margins rapidly and as their earnings increase, these companies are paying very strong dividends,” he told CNBC Thursday.

 Chidley cites Barrick Gold and Newmont Mining as top examples. “Every year they’ve been replacing their reserves. With the stock, you’re buying the reserve gold, plus you’re getting a return,” he added.

Chidley has an “overweight” rating on Barrick Gold, Randgold Resources, and El Dorado Gold. 

“We think the whole mining sector is attractive right now,” he said. “Although we’re seeing gold prices come down off recent highs [the precious metal has dropped over $60 from Friday’s close], at $1,660, or $1,650 an ounce, these gold companies can make decent money.”

On Friday, spot gold was hovering around $1,645. HSBC is forecasting a rise in price to $1,850 an ounce, not based on gold’s value as a safe-haven asset, but for its performance against other currencies. 

“We have been seeing devaluation of currencies versus gold,” he said. “It seems to be the anti-dollar play.”

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to Gold prices high. But gold stocks a bargain.
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2012/0316/Gold-prices-high.-But-gold-stocks-a-bargain
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe