Will Gold Stocks Outperform Gold Over the Coming Months?

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Here's a fun fact: When gold prices go up, it doesn't mean gold stocks go up too.
 
The price of gold, which recently went up to $1,520 an ounce, up 20% from last year, has greatly surpassed the earnings of gold equities (which dropped 8% over the same period). This is because, according to HSBC, "gold equities are two-thirds shares and one-third gold price." 

This implies that volatility in the overall stock market can affect gold stocks more than gold itself. "An environment of uncertainty, negative real interest rates and turbulent stock markets will cause gold equities to underperform, even while they benefit from a rise in the gold price," HSBC told Reuters.

That isn't to say gold prices don't impact gold stocks at all. Barrick Gold, AngloGold Ashanti and BHP Billiton, for example, all trade at rich premiums relative to earnings growth.

Gold is generally considered to be a low beta product, which means that it is less volatile than the overall market. In other words, whichever way the stock market swings, gold has a lesser reaction. That said, gold has skyrocketed in the last few years due to its status as a safe-haven currency in a time of debt crises and currency volatility.

Now, with investors willing to take on more risk, industry analysts are wondering if gold stocks will rebound in value. Catherine Raw of Gold & General Fund told Reuters, "gold price has outpaced cost inflation in the industry, meaning that gold miners are likely to see their margins and their profits increase this year… The fundamentals of gold companies have improved, and yet their shares have fallen."

Do you agree? Will these gold stocks soon rebound?

To help you find ideas, we've listed the worst performing gold stocks during the current quarter. Use the data as a starting-off point for your own analysis.

You can also click on the heat maps for an in-depth research report on the company's analyst sentiment and stock performance.

 

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

 

List sorted by performance over current quarter.
 

1. Rubicon Minerals Corporation (RBY): Gold Industry. Market cap of $745.90M. Current price at $3.49. Stock performance over the current quarter at -36.84%. The stock is currently stuck in a downtrend, trading -15.19% below its SMA20, -21.42% below its SMA50, and -26.33% below its SMA200. It's been a rough couple of days for the stock, losing 26.89% over the last week.

2. US Gold Corporation (UXG): Gold Industry. Market cap of $841.96M. Current price at $6.22. Stock performance over the current quarter at -35.08%. The stock has had a couple of great days, gaining 7.48% over the last week.

3. Entree Gold Inc. (EGI): Gold Industry. Market cap of $241.76M. Current price at $2.3. Stock performance over the current quarter at -31.27%. The stock has had a couple of great days, gaining 10.47% over the last week.

4. Kingold Jewelry, Inc. (KGJI): Gold Industry. Market cap of $70.36M. Current price at $1.51. Stock performance over the current quarter at -29.15%. The stock has had a couple of great days, gaining 6.02% over the last week. The stock has performed poorly over the last month, losing 10.76%.

5. Minco Gold Corporation (MGH): Gold Industry. Market cap of $88.30M. Current price at $1.84. Stock performance over the current quarter at -28.74%. The stock has had a couple of great days, gaining 9.32% over the last week.

6. Claude Resources, Inc. (CGR): Gold Industry. Market cap of $326.12M. Current price at $2.21. Stock performance over the current quarter at -26.57%. The stock has had a couple of great days, gaining 11.17% over the last week.

7. Charles & Colvard Ltd. (CTHR): Gold Industry. Market cap of $50.79M. Current price at $2.67. Stock performance over the current quarter at -26.12%. The stock is a short squeeze candidate, with a short float at 6.61% (equivalent to 34.23 days of average volume). The stock has lost 26.12% over the last year.

8. NovaGold Resources Inc. (NG): Gold Industry. Market cap of $2.43B. Current price at $10.05. Stock performance over the current quarter at -25.89%. The stock has had a couple of great days, gaining 13.81% over the last week.

9. International Tower Hill Mines Ltd. (THM): Gold Industry. Market cap of $668.07M. Current price at $7.81. Stock performance over the current quarter at -25.72%. The stock has had a couple of great days, gaining 10.78% over the last week.

10. Great Basin Gold Ltd. (GBG): Gold Industry. Market cap of $932.34M. Current price at $2.02. Stock performance over the current quarter at -24.91%. The stock has lost 24.91% over the last year.

By Becca Lipman



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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