Gold Stocks Are Surging And Here’s Why

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Gold is also no longer in as technically precarious a position as it was earlier in the year. After making 52-week lows in August, gold has rallied by 9% from its lows and is trending higher in the short run. Traders are buying gold companies such as Kinross Gold Corporation (USA) (NYSE:KGC), Yamana Gold Inc. (USA) (NYSE:AUY), and Gold Fields Limited (ADR) (NYSE:GFI) in anticipation of a continuation of the trend.

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Some gold companies are also trading at reasonable valuations given current gold price expectations. Barrick Gold Corporation (USA) (NYSE:ABX) trades at a forward P/E of 15.24, for example. If gold futures prices rally, Barrick Gold Corporation will earn more in earnings per share and its valuation will become even more attractive. According to our data, hedge funds were bullish on Barrick Gold Corporation (USA) (NYSE:ABX) in the second quarter. A total of 42 funds reported holding stakes worth $1.64 billion as of June 30, up from 41 funds and $1.41 billion respectively a quarter earlier.

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Disclosure: None

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