Tags: Miners | Gold | metal

FT: Investors Bet Miners Will Follow Gold’s Gains

Wednesday, 21 Sep 2011 08:51 AM

Gold prices have surged almost 30 percent this year, although stocks in the companies that mine the precious metal have not risen nearly that high.

Mining giant Barrack Gold, for example, is trading 40 cents higher than when the year began.

That means the time is now to snap up stocks in mining companies, as hedge funds and other investors already view the gap between the gold prices and gold miners as an opportunity that won't last.

"It’s something that everybody is thinking about at the moment," says Evy Hambro, manager of asset manager BlackRock's Gold & General fund, one of the largest gold funds, according to the Financial Times.

gold200AP.jpg
(Associated Press photo)
"A lot of our clients are switching out of the gold ETF [exchange traded fund] into gold equities and gold equity funds to take advantage of the opportunity."

Others agree the lag between the asset itself and the mining companies will be short lived.

"At some point it has to turn," says Nick Holland, chief executive of Gold Fields, the fourth-largest gold miner.

"We’re just at a strange point in the cycle."

Gold, popular among investors when currencies weaken and amid economic instability in general, is currently trading around $1,900 an ounce.

A Bloomberg survey shows that by year end, the yellow metal will be trading over $2,000.

"This is largely a crisis of confidence, and gold is a safe haven," says Rujan Panjwani, the president of Edelweiss Financial Services, according to Bloomberg.

"I see little chance of gold falling."

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Gold prices have surged almost 30 percent this year, although stocks in the companies that mine the precious metal have not risen nearly that high. Mining giant Barrack Gold, for example, is trading 40 cents higher than when the year began. That means the time is now to...
Miners,Gold,metal
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2011-51-21
 

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