Going for gold: An opportunity for 'intelligent speculation'

How do fund managers value gold stocks?

The valuation of gold stocks is quite different to most other stocks, because gold is unlike any other commodity.

A mine contains some gold embedded in ore that needs to be dug up and processed with as low a capital and operating cost as possible, before being sold into the gold market at the prevailing (or a previously hedged) price. There are cases and environments where even the world's best gold mines are simply a liability and worth nothing to shareholders, and there are other environments where their potential valuation could be truly enormous. Investment Conundrums: Ravenscroft bolsters gold exposure and eyes UK recovery In a bearish valuation scenario, as a shareholder you might own a ...