Tags: BlackRock | gold | stocks

BlackRock President: Gold Stocks Undervalued

Monday, 07 Nov 2011 08:59 AM

Gold prices may have taken a breather from their meteoric rise earlier this year, but they're poised to resume climbing — and so are the stocks in company that mine the metal, which are undervalued, says BlackRock President Robert S. Kapito.

Gold prices approached $2,000 an ounce this year on a weaker dollar, mounting inflationary fears and global economic uncertainty.

Prices are currently below $1,800 an ounce, but get ready for the buyers to come back in.
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"We still like gold. We invest in it because we like to own gold physically through our iShares called IAU," Kapito tells CNBC.

gold200APuseme.jpg
(Associated Press photo)
But stocks in companies that mine the metal are really cheap, and maybe even too cheap, Kapito adds.

"Gold stocks in particular have underperformed with the price of gold is. It's a very good hedge. It's taken on as the alternative currency, and I'll even give you a number today: we think gold can actually go over the $2,000 mark because we know things across the world aren't going to go straight up."

Other experts have pointed out that many gold miners have seen their stock prices plummet amid market meltdowns, which makes them right for bottom fishers.

"Bullion is a fear trade, going up faster than the stocks, but at some point I think this is going to reverse," David Skarica, editor of the Gold Stock Adviser newsletter, told Moneynews recently.

"Right now, I look at these ratios of gold stocks to gold. Those are near all-time lows telling me that probably in the next two to three years, gold stocks are a better bet than gold bullion."

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Gold prices may have taken a breather from their meteoric rise earlier this year, but they're poised to resume climbing and so are the stocks in company that mine the metal, which are undervalued, says BlackRock President Robert S. Kapito. Gold prices approached $2,000...
BlackRock,gold,stocks
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2011-59-07
Monday, 07 Nov 2011 08:59 AM
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