Commodities & Metals

The 2011 Gold Flop? Seeking The Best Gold Stock for 2011 (GLD, IAU, NEM, GG, ABX, KGC, GDX, GGN)

Gold was the darling trade for commodity investors and those seeking safe harbors as central banks printed money and promised to dilute their currencies for the future.  The first trading day of the year initially looked higher, but a slight retreat took gold to $1415.66 an ounce.  Now, this morning we show gold down about 2%, or $28.31, to $1,387.35 an ounce.  The SPDR Gold Shares (NYSE: GLD) is down 1.9% at $135.36 and the iShares Gold Trust (NYSE: IAU) is down 2% at $13.54.

Our intent is not to make the biggest bullish case nor the biggest bearish call for gold (the commodity) in 2011.  Goldman Sachs recently noted a level of $1,690.00 per ounce as the next target for 2011 and peaking at $1,750.00 per ounce beyond.  We are seeking the best gold investments for 2011 now that the major have been seen to see which offer either the best upside or even the best protection for 2011.  We are taking a look at Newmont Mining Corp. (NYSE: NEM), Goldcorp Inc. (NYSE: GG), Barrick Gold Corporation (NYSE: ABX), Kinross Gold Corporation (NYSE: KGC), Market Vectors Gold Miners ETF (NYSE: GDX), and even The Gabelli Global Gold, Natural Resources & Income Trust (NYSE: GGN).

The reality is that gold itself, including the ETFs of gold, is just not as likely to perform as well as some of the miners and some of the royalty players out there if the trend continues.  The caveat to that is of course stable gold or rising gold. If gold falls considerably, the leveraged nature of investing in stocks of most of the large gold miners could imply that gold miners and producers could fall more than gold itself if the price were to head further south.

We are taking a look at each issue below with 2010 closing prices, the most recent price after the drop, 52-week ranges, consensus analyst targets from Thomson Reuters, production costs, and adding color on each.