Gold prices and exchange traded funds (ETFs) have risen to such a point that it’s almost inevitable that someone will ask the question: “Am I too late to the party?”
According to the analysts at Thomas Weisel Partners Group Inc. (NASDAQ: TWPG), gold prices exhibited strength from August to early December 2009 because of the Fed’s quantitative easing announcement in March, China’s announcement of increased gold reserves in April and purchases of IMF gold by India in October, writes Ed Liston for Bezinga. Gold prices may continue positive trends on concerns over fiscal and monetary policies, comment the analysts. [Why investors are still flocking to gold.]
- SPDR Gold Shares (NYSEArca: GLD): down 2% in the last month
- Market Vectors Gold Miners (NYSEArca: GDX): down 2.4% in the last month
The 52-week range for GLD was between $78.87 to $119.54 while the 52-week range for GDX was between $27.15 to $55.40.
The analysts say that the year-end shares outstanding will increase 10% for gold miners because of equity risings. Net debt is estimated to drop 16%.
Gold miners have been increasing their reliance on project financing. The P/NAV multiples are contracting from 1.40x to 1.16x, according to the report, which reflects the miner’s acceptance of higher gold prices, larger operating margins, equity dilution and lower exploration successes. [Time for mining ETFs to shine?]
As always, watch the trend lines to determine where the opportunities lie. [How to follow trends.]
For more information on gold, visit our gold category.
Other gold related ETFs include:
- iShares COMEX Gold Trust (NYSEArca: IAU): down 2% in the last month
- PowerShares DB Gold Fund (NYSEArca: DGL): down 1.8% in the last month
- ETFS Physical Swiss Gold Shares (NYSEArca: SGOL): down 1.9% in the last month
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.