Gold equity prices showed more leverage than average to improved gold bullion prices over the first six months of 2014

John Robertson

PortfolioDirect

Gold equity prices showed more leverage than average to improved gold bullion prices over the first six months of 2014. A 21.6% rise in the NYSE basket of unhedged gold stocks (HUI) followed a 9.2% rise in the gold bullion price. The chart shows monthly movements in the gold bullion price on the horizontal axis and corresponding equity price movements on the vertical axis. The last six months (indicated by the red markers) have beaten the 1996-2013 response rate by an average 1.6 percentage points per month although all that difference can be accounted for by the strength in equity prices during June. Within the Australian market, the All Ordinaries gold share price index rose by 19.8%. The prices of 14 of the constituent stocks rose and the remaining 11 declined. The median return for this group was 13.7%.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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