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March 29, 2017

What #gold price are large cap gold stocks reflecting?

As can be seen from the Table below, Randgold Resources is trading at a 30% premium, which implies a gold price per ounce of US$ 1'635. On average the large capitalized group is trading at a premium of 5% or an implied gold price of US$ 1'321 per ounce.




- Gold Equities Continue to Lag the Underlying?…What Gold Price the Large Cap Gold Equities Reflecting?: Scotiabank Senior Precious Metals Analyst Tanya Jakusconek this morning noting that with the gold price continuing to march upwards post Fed (and post Trump's healthcare failure), she thought she would highlight the valuation level in the group and her stock recommendations. As per the chart below, the group is currently trading at an overall premium to gold price of just 5%!


Premium/Discount to Gold Price – %

Source: Scotiabank GBM Precious Metals Research


Recall that the "Implied Gold Price" resulting the calculated premium/discount (in the chart above and table below) is the gold price that would be need for the respective stocks to be trading at 1.0x NAV3% using Tanya's modeled estimates.


Source: Scotiabank GBM Precious Metals Research


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