Commodities & Metals

The Gold Stocks That Need To Catch Up To Gold (GLD, GDX, GDXJ, BVN, GSS, NAK, UXG, NEM, ABX, GG, AUY)

Since the beginning of July gold prices have risen nearly 7%, from around $1,500/ounce to today’s record high over $1,600/ounce. Risk is off the table in the equities markets as concerns over Congressional wrangling over the US debt ceiling and continuing strain on European sovereign debt send investors to the safe havens of gold.  The SPDR Gold Trust (NYSE: GLD) has already today posted a new 52-week high of $155.98. The gold miner ETFs, Market Vectors Gold Miners ETF (NYSE: GDX) and Market Vector Junior Gold Miners ETF (NYSE: GDXJ) are both higher today, but still short of 52-week highs.

In a story a couple of weeks ago, we included a chart of how far off 52-week highs Compania de Minas Buenaventura SA (NYSE: BVN), Golden Star Resources, Ltd. (AMEX: GSS), Northern Dynasty Minerals Ltd. (AMEX: NAK), and US Gold Corp. (NYSE: UXG) had fallen.  We also recently looked at larger miners like Newmont Mining Corp. (NYSE: NEM), Barrick Gold Corp. (NYSE: ABX), Goldcorp Inc. (NYSE: GG), and Yamana Gold, Inc. (NYSE: AUY) that were doing much better overall.

It seems that the stock market just wants to treat most gold stocks like regular stocks as many are just nowhere near highs like the shiny yellow stuff.  Here’s a chart of where these companies’ share prices stand as of mid-morning today:


Ticker % Below 52-week High Trailing P/E Ratio Forward P/E Ratio Price-Book Ratio
BVN 26.59 14.70 10.77 3.77
GSS 48.92 113.70 9.59 1.73
NAK 51.52 n/a n/a 6.78
UXG 31.41 n/a n/a 3.43
NEM 10.09 13.16 12.89 2.01
ABX 12.11 14.17 10.45 2.36
GG 2.19 20.58 19.63 2.18
AUY 0.82 21.28 12.11 1.36

Buenaventura has made up about 8% of its share price in the last two weeks, going from down -34.51% to down -26.59%. Golden Star has moved from down -59.90% to down -48.92%. Northern Dynasty has picked up a little as well, from down -53.91% to down -51.52%. US Gold has moved from down -37.39% to down -31.41%.

Except for Northern Dynasty, which is really a long-term play, the others have equaled or surpassed the rise in gold prices since the beginning of the month.

Among the larger companies, the widest differential a week ago was Barrick, down about -16%. Today, Barrick is down about -12% from 52-week highs. Yamana is almost even. Goldcorp evacuated employees and closed one of its Canadian mines because of nearby forest fires last Thursday and there is no word yet when the mine will reopen.

Because the big miners were closer to 52-week highs, their differentials closed less. Still, closing about a quarter of the gap in a week is an impressive performance.

The gap between current share prices and 52-week highs for the junior miners still has a long way to go before it is closed. But at least one of the larger miners could close the gap in another week if gold prices continue their upward march. And the others are within striking range as well.

Buenaventura shares are up more than 4%, to $41.99; Golden Star shares are up more than 3%, to $3.07; Northern Dynasty shares are up about 1%, to $10.55, and US Gold shares are up about 1.5%, to $6.77.

Newmont shares are up more than 2.5%, to $58.89; Barrick shares are up about 1.4%, to $48.99; Goldcorp shares are up about 1.5%, to $54.97; and Yamana shares are up more than 1.5%, to $13.32.

Paul Ausick

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