AngloGold is now below the 2008 lows and the not too far from the all time lows made several years ago. Many stocks in the sector are doing equally bad, and the fall during the last few days has hurt the sentiments. Though there was a rebound on Friday with volumes, the movement next week will determine how things move from here on. Some are predicting more pain, while many are now saying that the fall may have become excessive and the bottom may be near. Some notable investors like Jim Grant, Marc Faber and George Soros are slightly more positive on the sector. The sentiments may take some time to improve, but it seems that the crash over the last few months is now getting overdone. Most companies are trading at a discount to book value, and almost all gold / silver stocks have halved from recent peaks. AngloGold is also trading just around book value. The low valuations in the sector have prompted some acquisitions by bigger companies. Some have purchased stake in development stage assets, and there have been deals in the streaming / royalty segment also. These stocks are available at attractive valuations. Coeur had hinted at some acquisitions in the properties surrounding it in Nevada. It already has a stake in Pershing Gold (PGLC) which a development stage company expected to start production next year. Prior to last week's fall, there was some stability, and the stocks had begun to trade in a range. Reduction in quantitative easing was already on the cards and many were expecting that to happen by year end. So the fall was a bit surprising. In any case, now the stocks are trading at crucial levels and it is important that they stabilize and consolidate. Next week will be interesting to see how the markets and the gold stocks behave.
