Interesting Information About Gold Mining Stocks in 2015
So far during the first four trading days of 2015: oil is down 8.6%, the S&P 500 is down 1.6%, Gold is up 2.2%, Silver is up 6%, and the HUI gold stock index is up 10.4%.
A perfect storm is forming for gold mining stocks. In the 3Q of 2014, gold miners reported positive free cash flow of $232.7 million, their highest free cash flow since the 3Q of 2011 when the HUI was 3 1/2X higher!
The two biggest costs of gold miners are fuel and wages. In 2013, the average gold miner spent over $100 on diesel for every ounce of gold produced - and diesel prices have declined 20% in recent months. The recent decline in diesel alone could increase the operating cash flow of gold miners by 10% of more.
Over the last two months, gold has gained 5.3% vs. the US Dollar - rising from $1,153.61 per oz to $1,214.60 per oz. Amazingly, the US Dollar Index has been rallying at the same time as gold - resulting in gold making even larger gains vs. foreign currencies including a gain of 9.2% vs. the Canadian Dollar and a gain of 13.1% vs. the Australian Dollar.
Gold miners with operations outside of the US will be able to sell their gold for US dollars, but pay wages in their weaker local currency. Therefore, gold miners will benefit big time in the upcoming quarters from 1) Rising Gold Prices, 2) Lower Fuel Prices, 3) Lower Wage Costs.
Today, NIA will be announcing its top gold/silver stock suggestions for 2015. Some of these stocks have the potential to triple or quadruple in the short-term
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