Could Gold Stocks Investors Be Showing Signs Of Confidence?
Are gold stock investors drawing a line in the sand? This morning gold is down, which usually means gold stocks would be down. Instead, some of the gold stocks are showing green on the screen. Even down the food chain down to gold mine developers and explorers with important discoveries are showing some confidence.
The market for gold stocks was in a bear market, while gold was in a powerful bull market, until the middle of February this year. Even while coming off the canvas, on days when gold was up the gold stocks were reluctantly green. On days when gold was down, the gold stock market was very efficient at moving into the red.
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Spotlight On A Top Pick
This section of the written reports is for highlighting sponsors at Rocks And Stocks News and top picks.
Agnico Eagle is the cream of the crop when it comes to the Big 3 gold miners by far. While Newmont and Barrick are challenged when it comes to containing costs of production and increasing production, Agnico Eagle is firing on all cylinders.
Agnico Eagle just announced their fourth consecutive quarter with record free cash flow. They are making money hand over fist because they are excellent operators that have their cost of production well below the average cost of production amongst major gold miners. Which makes for remarkable profit margins.
In addition they are making efforts to lower their cost of production, and increase their production, plus are replacing what they mine.
They are the best in breed major gold miners by far.
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Of course, a few hours of trading with gold down and gold stocks up is not enough to say a trend is developing. Let’s call it some nice green shoots (or gold shoots) sprouting.
The supply and demand story for gold is very bullish whether looking at short-term or long-term scenarios. While gold stocks have come off the canvas since earlier this year, they are still trading at historically low valuations when considering key long-term metrics.
Here is to, a powerful gold bull market with the best in breed gold miners, high-quality new mine developers and explorers with important discoveries joining the party in an even more powerful way.
All the best,
Allan Barry Laboucan
