Sunday, July 8, 2007

Showtime for Gold Stocks?

Based on stories I've heard recently, gold apparently starts rallying during the summer months (typically in August) on a historical basis. Is it possible that gold mining stocks are finally going to start recovering?

One of my two gold mining stocks, Agnico-Eagle Mines (AEM-T), appears to have recently reversed its uptrend as illustrated in the chart below.

The second gold mining stock in my portfolio is Goldcorp (G-T). As you can see from the chart below, it hasn't convincingly broken out of its downtrend just yet

Although AEM looks tempting, I doubt I'll place any additional funds in these two gold stocks as I've had more success investing in other sectors. I believe every portfolio should have exposure to gold just in case the gold bugs are right but at this point in time, I am comfortable with my portfolio's weighting in gold. I see these two stocks as long-term holds and expect that they will be taken over one day. That being said, I might invest in another gold stock if I see an opportunity for a quick gain.

Kitco currently has a bid / ask price for gold of 652.50 / 654.00.

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