Gold for immediate delivery closed at $1,178.55 per troy ounce on the London Bullion Market on Tuesday, down $10.95 per troy ounce or -0.92% from the previous trading day.
Source: Kitco.com
At the beginning of 2017, gold increased $27.2 per troy ounce (or 2.4%) from $1,148.65 per troy ounce on Jan. 3 to $1,175.85 per troy ounce on Jan. 6. The precious metal is going down again as the U.S. dollar is appreciating against other currencies.
The U.S. Dollar Index is currently trading around $102.40, up 39 cents or 0.38% from Tuesday.
On the Comex Futures, gold has been uptrending since the beginning of the new year. On Jan. 11, the contracts through which the precious metal is traded are pricing gold at $1,188 per ounce, up $3.50 or 0.3% from the previous trading day.
Year to date, Market Vectors Gold Miners ETF (GDX, Financial) gained 7% and outperformed the biggest gold producers of the industry. The index outperformed Barrick Gold Corp. (ABX, Financial) by 8%, Goldcorp Inc. (GG, Financial) by 4% and Newmont Mining Corp. (NEM, Financial) by 6%.
Barrick, the world’s largest gold producer, is currently trading around $16.42 per share at 2.55 times the book value and 6.31 times the Ebitda. The enterprise value is $25.47 billion.
Goldcorp is trading around $14.29 per share at 0.91 times the Ebitda. The EV/Ebitda ratio is 14.29.
Newmont is trading around $34.16 per share with a price-book ratio of 1.63 and an EV/Ebitda ratio of 6.75.
Since the majority of analysts forecast gold will not trade higher than $1,250 per ounce in 2017, it is wise to invest in those gold miners who can economically mine the precious metal from gold reserves at the lowest price per ounce.
For this reason, Barrick Gold is one of best gold stocks since the company has defined its gold reserves at a price per ounce of $1,000.
Disclosure: I have no positions in any securities mentioned in this article.
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