Silver as an investment

Gold Mining Stocks Are Beating Bullion: A Win-Win

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

news.goldseek.com / By Frank Holmes / 1 August 2014

For the first time in at least a couple of years, gold mining stock returns are outpacing those of the yellow metal itself.

As you can see in the chart below, the NYSE Arca Gold BUGS Index has given back 22.31 percent year-to-date (YTD), whereas gold has delivered 7.74 percent.

This is good news for both equities and bullion. When miners are doing well, gold tends to follow suit. Indeed, since the beginning of the year, spot gold has seen steady growth following a lackluster 2013. As I noted earlier in the month, it’s been one of the best-performing commodities of the year so far, a mere nugget’s throw behind nickel and palladium.

Miners restructuring their business strategy.

Gold mining, to be sure, is a tough gig. When gold prices are between $1,000 and $1,200 an ounce, miners barely break even in terms of cash flow.

Last year was particularly brutal. The metal plunged 28 percent—from $1,675 to about $1,200—which was the largest annual drop since 1981.

To reduce risk, many companies have cut costs in several ways. Some have decreased capital spending. Others have sold off assets. Others still have placed exploration on standby.

READ MORE

Thanks to BrotherJohnF