Did the San Francisco 49ers Strike Gold? SPDR Gold Trust (GLD), Barrick Gold Corporation (ABX)

Of additional note, the U.S. dollar was mixed after last week’s jobs report. The consensus had been for a gain of 160,000 jobs and a steady unemployment rate at 7.8%. The actual number came in at 157,000, with an uptick to 7.9% for the unemployment rate. The dollar fell against both the euro and the Swiss franc. The strength of the dollar has been another bearish factor for gold in recent weeks. Signs of weakness for the U.S. currency should be seen as a positive for gold.

All that glitters
In additional to a straight allocation to the commodity or the gold ETF, my favorite gold miner remains Barrick Gold Corporation (NYSE:ABX) . With a dividend yield of 2.5%, an operating margin of 35%, and its remaining status as the largest gold miner on the planet, it is well positioned to weather the drags facing the entire sector. While Newmont Mining Corp (NYSE:NEM) , for example, is also addressing the ballooning production costs and environmental concerns that face Barrick, the numbers are not as solid. Newmont carries a current trailing P/E of 201, relative to Barrick at 10. Newmont has a slightly higher dividend yield at 3.2% and matches Barrick’s 35% operating margin, but its overall portfolio is not as attractive in my opinion.

Ultimately, gold appears to be very well positioned to rise as various global macroeconomic factors play out over the next several weeks and months. The glimmers of positive news in the economy are overshadowed by continued weakness. The stock market’s failure to acknowledge this weakness is a buying opportunity, not a major cause for concern. I am not advocating blindly rushing into gold, but a healthy allocation is still warranted.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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