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December 8, 2005
Goldminers are outperforming bullion this week, Thur., Dec. 8, 2005, 10:48 AM
Through the end of last week, there was some selling in the goldminer stocks (black), which caused them to under-perform the bullion (blue). I said at the time it was probably due to some Fidelity fund managers making yet another mistake. That was clearly a comment made in jest.
But what the selling could have come from was some gold fund managers who wanted to book profits for the month-end, getting ready to start a Christmas season promotion on their fund. This week the picture changed. Gold stocks, as they should, out-performed the bullion (NYSE: GLD).
After all this is a gold bull market, and the leveraged goldminers are the more attractive securities to buy.
If you happen to be a "Nervous Nelly" " no problem with that since I'm starting to be called T-Billy on account of my 78 pct cash position " then its ok to hold GLD or IAU. The more you do, the higher the gold bullion price has to go, which translates into a higher Discounted Cash Flow valuation of the goldminer producers. Thank you.
Posted by Posted by Bill Cara on December 8, 2005 10:48:54 AM | Category: Bullion , Gold , Goldminer Producers