Gold mining stocks outperform gold – can it last? | Metals Mine

  • Gold mining stocks outperform gold – can it last?

    From moneyweek.com

    There have been two big developments in gold recently. The first is that the metal itself is reaching new highs: this week, it passed $3,500 per ounce for the first time. The other is that gold mining stocks are outperforming gold, which is something we have not really seen in this cycle. Gold miners are a geared play on gold. When gold goes up, they rise higher; when it goes down, they fall further. This is because they have operational leverage: relatively high fixed costs mean that they make weak profits when gold prices are depressed, but higher prices can translate into a strong increase in margins. Of course, ... (full story)

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