Time to invest in gold... if so what vehicle?

[rolando87]

Plenty of value in TSX miners right now. Should play out in February earnings as long as nothing dramatic happens to metal prices or broader markets. Some subtle strength today in stocks that have corrected hard recently. I look at CXB under $2 it's an irrational level given they made 10 cents a share last quarter and are forecasting that level all year. Last earnings report they shot up to $2.80 a share. The larger Gold miners like Kinross seem to have baked in some pessimism on Gold prices or unknown issues. I suspect they'll just report a good number again.

The sector would test anyone's patience since August but sometimes the best trades are like that. Gold at $1872 isn't far off the old ATH and that seems to be a forgotten reality.

CXB has been one of my best trades in the last year, been holding and accumulating since it was $0.60. I think it will recover once gold gets the spotlight again. The management team is smart and experienced prob one of the best junior gold plays imo. Much better than buying GLD outright.

 

[narafa]

Thanks a bunch narafa! Just so I know, why do you recommend GDX, but not the leveraged gold miners or I guess the "junior" gold minors, and not GLD?

Well, GDX is just the bunch of large cap gold miners mainly, which in my opinion tend to do fairly well in the early & middle cycles of a bull market. The Junior ETFs mainly represent the mid & small caps within this industry, so again, my opinion is that they are more risky and they benefit more towards the late part of the cycle.

The leveraged ETFs are flawed in how they are structured because of the cost of financing they incur to allow the leverage (2x or 3x). If you experience a sideways period, the non-leveraged will move sideways but the leveraged ones will go down. You might think that since interest rates are so low, the cost of financing must be low, it's not.

If I buy into any form of gold and there IS this run on gold, however unlikely, would be a GOOD thing for me, right?

Absolutely.

 

[Nine_Ender]

Thanks Nine_Ender - so Toronto exchange - do you think the miners are more valuable there than the ones on the U.S. market? Or you just pay attention to those ones as you are Canadian maybe? Thanks!

I gravitated to the TSX because in March I suspected CDN$/US$ was going up. In mining and energy it works fine but of course some of them have US listings as well. I find the TSX is highly inefficient sometimes and oversells on corrections which can be taken advantage of but can test your patience at times too. Gold miners and energy plenty of choices here. Copper miners only a few quality options, and our silver companies don't seem all that good yet at translating higher Silver prices into earnings.

 

[Saltynuts]

Well, GDX is just the bunch of large cap gold miners mainly, which in my opinion tend to do fairly well in the early & middle cycles of a bull market. The Junior ETFs mainly represent the mid & small caps within this industry, so again, my opinion is that they are more risky and they benefit more towards the late part of the cycle.

The leveraged ETFs are flawed in how they are structured because of the cost of financing they incur to allow the leverage (2x or 3x). If you experience a sideways period, the non-leveraged will move sideways but the leveraged ones will go down. You might think that since interest rates are so low, the cost of financing must be low, it's not.



Absolutely.

Thank you narafa! On the leveraged products, I am aware of their tendency to drop in price a bit over time given their leverage. Seems the best idea might be to short the short leveraged products if one wants to go long.

 

[Saltynuts]

I gravitated to the TSX because in March I suspected CDN$/US$ was going up. In mining and energy it works fine but of course some of them have US listings as well. I find the TSX is highly inefficient sometimes and oversells on corrections which can be taken advantage of but can test your patience at times too. Gold miners and energy plenty of choices here. Copper miners only a few quality options, and our silver companies don't seem all that good yet at translating higher Silver prices into earnings.

Very interesting Nine_Ender, thanks! Will haver to check out the TSX, no nothing about it. But I see its like the 8th biggest exchange in the world, that's no chump change!

 

[senumouv]

Gold sounds like a great investment opportunity. You can look into some historical data and the current prices and analyse them. It’s value has been increasing for some time now.

 

[maxinger]

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[maxinger]

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[Eikfe]

Hopefully MR precious metal aka Rick Rule will make sense to you.

 

[Jones75]

Very interesting Nine_Ender, thanks! Will haver to check out the TSX, no nothing about it. But I see its like the 8th biggest exchange in the world, that's no chump change!

I too, am strictly on the TSX now. However my only three holdings (no longer day trade) are listed on both the TSX and the NYSE. Two of the three are, Barrick and Newmont (one, two in gold miners). Because of the dollar exchange, the price fluctuations are more prevanlent on the TSX.

And I should add, I pay U.S. taxes on Newmont even though I trade it on the TSX.