We think now is a great time for gold stocks

Article Excerpt

The price of gold has been on an upwards trajectory since it dropped to $1,050 U.S. an ounce in December 2015. It’s now 62% higher at $1,699. Still, that’s below the previous peak of $1,897 per ounce reached in September 2011. Meantime, gold stocks have also started to perform better after a prolonged slump. A broad index of global gold miners is up by 170% since January 2016. Gold bears point to very limited industrial use for gold as well as the fact that physical holdings produce no income for investors. Besides, they argue, the vast quantities of gold held by central banks create an overhang as it may be dumped on the market. That would depress the price. Nonetheless, gold has historically played a stabilizing role in investment portfolios during market upheavals. It can also provide a hedge against inflation and a drop in the U.S. dollar. And now, with government debt levels pushed up to uncomfortable levels and central banks…

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