The Gold Report’sfirst-ever survey of fund managers who invest heavily in junior gold mining stocks reveals cautious optimism on the sector’s performance in 2013. The historical performance of gold in the year following a U.S. presidential election, the devaluing of the U.S. dollar and current low valuations for gold miners all bode well for an upturn this year, but some doubts remain. Learn how professional investors decide which companies are worth investing millions of dollars in this year.
Five fund managers participated in the survey: Frank Holmes of U.S. Global Investors, Brian Ostroff of Windermere Capital, Steve Palmer of AlphaNorth Asset Management, Peter Vermeulen of Plethora Precious Metals Fund and Adrian Day of Adrian Day Asset Management.
One reason for optimism is the historical performance of gold and gold equities during and after a U.S. presidential election. Gold and gold mining stocks both fell significantly last year during the contest between President Barack Obama and former Massachusetts Gov. Mitt Romney. One fund managers believes that bodes well for a rebound for gold and gold stocks this year because historically the precious metal and gold equities have performed well in the year after an election. Others expressed the opinion that further devaluation of the U.S. dollar, which could result from the Federal Reserve’s asset purchases and/or the failure of the president and Congress to reach a deal on spending cuts, will boost the prospects for gold generally and gold stocks in particular. In addition, the fund managers asserted that gold producers are very close to their historic valuation lows again. That, too, may signal the possibility of a rebound.
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Source: Special to The Gold Report (1/21/13)