For me, I invest in Nem and ABX for short term moves in gold. They have the most dramatic and early moves, and both are heavily traded making entry and exit points easy. ABX was one of the earliest participants in the forward market, while Nem is new to the game. They both have excellent balance sheets and continue to consolidate their positions as high ounces producers with more than 30 million ounces of reserves. I also like FCX, although I am not fond of the environment in which they are doing business. I also think their management leaves somethings to be desired. Moffet has seen better days, and he should use his excess cash flow more wisely. Had he not dividended the majority of it out, he could have diversified freeport out of Indonesia.
I like the juniors you mentioned, but think that the junior market has a way to go before it participates in the relatively modest rallies the gold market has had recently. Todays action is a good indication of the skepticism in the market, gold rallied in the morning, retreated in midday, and recovered somewhat during the day. The XAU retreated, savy investors are guarding their profits and maintaining a watch and see perspective, regardless of all the hype indicating an imminent rise in the price of gold.
I mentioned earlier, I believe their is a distinct possibility that the current move is designed to take some of the heat off the IMF/BOE/Swiss bank sales and the price will rise to a level where the criticism recedes. If this is the case, the action will not be in the juniors this round.
Ken |
