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Gold Mining Stocks Continue to Lag Behind Gold Prices in 2013
Gold mining stocks have largely underperformed gold prices over the past few years. Gold prices fell below $1,600 an ounce Tuesday as strong U.S. economic data and news of Cyprus’ bailout deal tarnished the metals safe haven appeal to investors. The SPDR Gold Trust ETF (GLD) has fallen roughly 4.5 percent year-to-date, while the Market Vectors Gold Miners ETF (GDX) has fallen roughly 20 percent over the same period. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Eldorado Gold Corp. (NYSE: EGO) (TSX: ELD) and IAMGOLD Corp. (NYSE: IAG) (TSX: IMG).
“Investors are not really looking for safe havens at the moment,” Eugen Weinberg, head of Commodities research at Commerzbank, said to Reuters. “Gold as inflation protection should get more demand from investors in the second half of the year. Right now, the market participants are looking for more yield and they’re finding it in other asset classes like equities.”
While investment demand for gold has slid, purchases from central banks have experienced a steady rise. Gold purchases from central banks in 2012 totaled 534.6 tons, a 48-year high. Official gold reserves of global central banks have surged from $2 trillion in 2000 to over $12 trillion last year, according to a report issued by the World Gold Council.
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Read More: http://www.stockgoldmarket.com/gold-mining-stocks-continue-to-lag-behind-gold-prices-in-2013
