Going for gold: An opportunity for 'intelligent speculation'

How do fund managers value gold stocks?

clock • 3 min read

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 ...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Commodities

Charles Stanley Direct: Explaining the gold spike

Charles Stanley Direct: Explaining the gold spike

Reaching a record high

Rob Morgan
clock 05 December 2023 • 4 min read
London Metal Exchange wins legal case against nickel trading suspension

London Metal Exchange wins legal case against nickel trading suspension

Brought by Elliot IM and Jane Street

Elliot Gulliver-Needham
clock 30 November 2023 • 1 min read
RBC Brewin Dolphin's Janet Mui: Energy price volatility is here to stay

RBC Brewin Dolphin's Janet Mui: Energy price volatility is here to stay

Energy price shocks

Janet Mui
clock 21 November 2023 • 4 min read
Trustpilot