Why Investors Shouldn’t Miss This Opportunity in Gold Stocks

By Sarah Benali of Kitco News

Friday August 05, 2016 11:47

(Kitco News) - Gold is in a strong bull market, and it’s only going to get better, this according to Barry Dawes, executive chairman of Australian–based financial services firm Martin Place Securities.

But, although he expects gold prices to rise as high as $1,500 by year end, Dawes argues that investors should look for gold shares to gain most.

“The companies that have remodeled themselves and that are back on track are now starting to pay dividends,” he told Kitco News in an interview Friday. “I think that the gold sector dividends over the next few years, with the strong gold price, will be very substantial and that’s going to attract a lot more interest.”

Gold stocks, Dawes continued, are still “very cheap” when compared to the gold price and to equity markets, and thus has much more upside potential.

Although much attention is put on gold’s nearly 27% rise since December, the Gold Miners ETF Market Vectors exchange-traded fund (GDX) – a good gauge of investor interest in the mining sector – has rallied far more, up over 120% year to date.

According to Dawes, gold is in a powerful bull market and it is likely to stick around for at least the next 20 years. Unlike the doomsayers, Dawes is calling for a global economic boom and thinks gold stands to gain.

“The world has never been as wealthy and the wealth is no longer a U.S. or Europe dominated force. China, India and South East Asia are now wealthy blocs with over 3,300 million people,” he said.

Despite an early morning dip on Friday following a positive U.S. jobs report, December Comex gold futures last traded down 1.64% at $1,345 an ounce. Meanwhile, the GDX continues to trade at levels last seen in 2013, down 2.91% at $30.32 on the day.

Source:Kitco