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Gold miners

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

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Gold miners

Hi MM long term member and love your insight of the market. You have mentioned a few times that this is as good as it gets for gold. Does this statement apply to gold mining companies? Or will patience be rewarded with a higher gold price flowing through to higher earnings moving forward? Thanks Andrew

Answer

Hi Andrew,

If/when the gold price does correct in all likelihood the majority of gold stocks will follow suit:

  • In April/May Gold slipped 6.7% and Evolution Mining (EVN) and Northern Star (NST) corrected -23% and -19% respectively.

We trimmed our position in Evolution (EVN) due to the premise that it may be “as good as it gets for gold” with the tailwind from falling interest rates, weakening $US and ongoing demand from China & India already built into the market but the tailwinds are still there hence we’ve retained our position given the strong trend, it’s just been pared back slightly for now.

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Gold Spot ($US/oz)
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