Barrick Mining (ABX.TO)

Ultimately gold is probably going to go higher, but right now when you look at this company, it is probably repricing in $1500, $1600, $1700 gold already. You are not buying this because there is good value there, you are buying it because it is a safety play right now. The stock is already becoming unglued and gold is not up very much, so he is not sure gold gives you the safety it used to.

Gold has gone up with fears about the BREXIT and global uncertainties. If there is some easing on the fears of BREXIT, then he could see gold pulling back $100 an ounce.

Gold. We are in an environment of currency wars, and as long as there is lesser confidence in the US currency appreciating, that means there is money going towards gold. The deferral of rising interest rates means that the US$ remains depressed for a longer period of time. Because of that, gold gets a significant lift. That can continue, because there always seems to be some excuse to not move on rates. He owns a different gold stock.

(Market Call Minute.) Not his favourite gold. Has had a nice rebound, but it is very large and harder to grow. Of the seniors, he prefers Goldcorp (G-T).

Has had a really nice rally year to date with the gold price recovery. Thinks the stocks are a little ahead of the commodity. There is political uncertainty which would be beneficial for gold. If the US$ weakens, that would also be beneficial for gold. Her preference is to own the actual commodity, or the Central Fund of Canada.

The last few quarters have been much better than they have been with all the write-downs of the past. At the end of the day, the challenge is that gold companies don’t create a lot of shareholder value. They raise money, spend on new developments and mining, punch holes in the ground. If gold is going up, the stock goes up, but in the end take huge write-downs, and never generate much in the way of free cash flow. He is a little skeptical about the group. He would prefer using an ETF.

We are approaching the period of seasonal strength for gold and gold miners. From July all the way through to October, stocks like this tend to do quite well. Technically you are probably not going to see much downside. It gapped higher today. There was a plunge in the US$ which is favourable for gold. There is support at the 20 and 50 day moving averages. The trend is still positive. If you can buy this closer to the 50 day moving average, that would be ideal.

This is not the one he would roll the dice on if it was going to be just one. There is not much asset growth longer term. Play a domestic, mid-sized company. Prefers GLD-N for hedging using gold.

Gold is re-testing the highs. You can see the downtrend line has been broken and this is bullish. For every big commodity trend to be broken, you need to take out the high cost producers, which we have done. You have reduced supply and this is bullish along with reduced interest rates. Canada is a politically stable country. This one looks better than SLW-T

Evaluating gold is next to impossible. Has made some tremendous mistakes in acquisitions and the write offs that they have had. He avoids gold companies generally.

It has been a great buy. You are buying the commodity, and operating leverages. This has both. This one has too much financial risk to it because of its debt, however.

Is last year’s low meaningful? Is the volume supporting upward momentum? This is probably a legitimate advance and it should take out the next high. He would make sure you do not take out last year’s low. The peaks of last year would be reasonable points to correct to, (~$11).

$1240-$1400 is his short term range, but even there a lot of gold companies will do much better than they had thought. Slashing debt where they can and focusing on the projects they are working on.

This will be volatile. Gold responds more to currency fluctuations than anything else. It is a bit of a myth that gold is an inflation hedge. The concern he has is that there could be some big currency moves out of China. A lot of producers tend to move ahead of the commodity by 3-4 months. He would wait for the gold producers to come back. Thinks this will be higher 3 months from now.

As a value investor, he cannot find value in gold or gold stocks. These are traded for emotion. Right now the US$ is showing a little bit of weakness, so gold is going up. It is probably okay to own for a trade, but he wouldn’t own it as a long-term investment.