While gold-miner stocks have vastly underperformed the broader market for the past five years, they're starting to look attractive, according to San Diego money manager Bill Gunderson.
"Given the increased geopolitical risk in the world, particularly in the Middle East and the Ukraine, gold stocks are starting to move up in my rankings," he writes in a column for
MarketWatch.
One company that he likes is Randgold Resources (Ticker: GOLD), which has returned 38.9 percent so far this year. That beats many of its peers. The Market Vectors Gold Miners exchange-traded fund has returned 25.9 percent in 2014.
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Randgold Resources develops gold deposits in sub-Saharan West Africa.
"Despite some investors’ wariness about investing in Africa, West Africa has been a very stable mining jurisdiction and has a lot of unexplored lands which contain high-grade gold deposits," Gunderson, editor of the Gunderson Report, notes.
"The company is also very focused on profitability and low-cost production. . . . It has no debt and has been prudent with its acquisitions."
Thursday, gold rose for a second-day in London as new sanctions on Russia increased haven demand and on speculation prices near a three-week low will spur more buying.
Gold for immediate delivery rose 0.3 percent to $1,303.03 by 9:51 a.m. in London, according to
Bloomberg. Gold for August delivery gained 0.3 percent to $1,303.40 on the Comex in New York.
Gold bullion fell to $1,292.26 an ounce, a three-week low, on Tuesday despite comments from Federal Reserve Chairman Janet Yellen indicating the central bank is in no rush to raise interest rates.
"Yellen defending the current policy was expected, but ultimately rates will be hiked and investors won't have reason to hold gold," VTB Capital analyst Andrey Kryuchenkov tells
Reuters.
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