FYI: With prices at multiyear lows, this could be a profitable buying opportunity
As good as gold: If bullion prices rise, you could take your profits and buy a golden Ferrari.
It looked like gold-mining stocks finally bottomed out about a year ago.
After prices for the yellow metal peaked in the summer of 2011 at around $1,900 an ounce, they crashed almost 40% to around $1,200 at the start of 2014. Gold miners were brutalized, with the Market Vectors Gold Miners ETF GDX, -0.58% plummeting 65% from September 2011 through January of this year.
Regards,
Ted
http://www.marketwatch.com/story/gold-miners-pain-could-be-investors-gain-2014-11-17/print
Comments
Below is my thinking and what I have been doing.
Old_Skeet has started to nibble in the miners and recently opened a position in SGGDX which consists of about 70% miners and 20% gold bullion itself. In doing some research I am finding that the all in cost estimates to mine and produce an ounce of gold is about $1050.00. Some are saying gold could drop to $800.00 an ounce range and it might but I am finding this a little hard to believe. In addition, I am finding that all in cost estimates to mine and produce an ounce of silver are said by some to average about $19.00 to $20.00. Seems silver is currently selling below this at about $16.00 an ounce.
Since, I am a long term investor I feel the best time to start a position in something is when it is out of favor. Morningstar is showing that gold is about 30% undervalued in their Fair Market Valuation Graph which I have linked below. To view this click on the link below then click on the industry tab, then click on basic materials tab, then click on gold ... If this is correct and then by my math this puts the fair value on gold at about $1,500 an ounce.
Interestingly, the graph on silver is not currently working.
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx
Perhaps, others that know more about the metals than I might make some comments on this.
I wish all ... "Good Investing."
Old_Skeet