subject: May Gold Strike $2,000 Mark? Which Gold Stocks To Get? [print this page] Gold prices are headed for his or her 12th straight annual gain. People are worried that central banks and governments around the world will keep on with their loose monetary policies and will add more government measures to advertise recovery and deal with the European debt crisis, causing a devaluation of currencies and higher inflation.
Gold is up 10 per cent YTD and from December 2008 to June 2011, whilst the Fed bought $2.3 billion worth of debt within the last two rounds of QE, precious metals rose by a whopping 70 per cent.
By 14 November, 2012, gold for immediate delivery is trading at $1725.8 per ounce.
Silver price information the past five years
Gold price information going back 22 years
According to Raymond Key, Deutsche Bank's international head of materials dealing in London, as central banks continue with their efforts to maintain recovery, silver costs next year will more than likely surge to record levels of above $2000 an ounce.
"We'll sign up for $2,000, we'll go higher," Key said in an interview, "That is on the view that they will continue to print money."
In its official statement on October 24, the Fed stated that it would stick to its connection getting program, under which it buys $40 million of mortgage debt every month, until there's significant improvement seen in the bonds market. Moreover, the bank pledged to keep key rates of interest at report low levels until 2015, in order to increase the economy.
In Europe, Mario Draghi, European Central Bank's president, stated that if governments fulfill the essential conditions, ECB is able to trigger its bond purchase system and begin buying bonds from debt ridden nations.
On the other side of the planet, the Financial Institution of Japan on October 30 expanded (second amount of time in two months) its resources purchase program by 20 per cent to 66 trillion Yen, in addition to a 25 trillion Yen separate credit loan program. In order to enhance credit demand, the Japanese central bank has pledged further limitless loans to banks.
Gold stocks on one other hand have didn't fit the recent move in gold spot rates. As you can observe from the chart below, Barrick Gold Corporation (ABX) was down 13 per cent within the last month, Yamana Gold, Inc. (AUY) down 1 per cent and Newmont Mining (NEM) down 16 per cent.
NEM, ABX, and AUY's stock performance within the last few month (Source: Yahoo Finance)
We remain high on AUY due to its growing production, lasting dividend yield and long haul growth prospects. While NEM and ABX's share prices have dropped YTD, AUY increased 23 percent YTD. The company features a dividend yield of 1.3 %.
We're bullish on ABX for long term investors because of its resource and supplies base, which is the greatest in the market. It's a solid production base for copper and gold. Gold's production base is anticipated to be more than 8 million ounces yearly by 2015, after Pascua-Lama (PL) and Pueblo Viejo come in full production mode. The business has an beautiful dividend yield of 2.3 percent and is trading at low priced appraisals in comparison to its peers.
We've a simple score for NEM, the third stock inside our protection. We believe the business features a strong base of operations but rising prices, specially at its APAC operations, and declining production remain concerns for NEM.
