Wednesday, November 25, 2020

Tag: Value Alert for New Gold Producer

Value Alert for New Gold Producer

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by Jeff Nielson, Gold Seek:

It’s getting silly. Well-run junior gold mining companies are advancing their operations and meeting or exceeding expectations, and their reward? The stock goes down.

Admittedly, the price of gold has slumped recently. But this is an aberration. Mine reserves for the senior gold producers are plummeting. Mine production is falling. There is substantial underinvestment in the sector because the current price for gold isn’t close to what is required to sustain the industry.

The price of gold must rise. Yet current valuations for mining companies imply that women around the world are about to stop wearing (and wanting) jewelry, central banks are about to stop hoarding gold, and sophisticated investors will stop adding gold to their portfolios as the world’s premier “safe haven” asset. Absurd.