This week, I’ll be looking at gold and some producers. Gold has historically been a fantastic asset class, and though many have lamented in the last few years over the lack of volatility, in the long run holding gold has produced fantastic gains. 

Whilst Stockopedia does not have commodity charts, we can see the price increase since 2008 from Gold Bullion Securities – an ETF that offers security holders a simple way to access the gold market by providing returns that are equivalent to the movements in the gold spot price.

ApxjCKALFVtGEemNVNHSe1L4UO7iD3DJE3lrg-LQCoronavirus in recent weeks has helped to push the spot price higher, as fears of a spanner being thrown in the works of the global economy has seen equities – especially those with exposure to China in manufacturing and supply chain – sell off. 

That may be short term, but looking back over the price of gold the trend is here to stay. In reality, gold is a fairly useless piece of rock. The vast majority of it is used in jewellery and investment, but it’s the value that everyone collectively places on it that gives it its value. Many believe Bitcoin is fundamentally worthless as it has no intrinsic value. But what is the intrinsic value of gold? If I have a big nugget in my house – what can I do with that other than to sell it to someone who sees value in it? So long as people keep believing in gold’s value – which history has shown is likely – the long term of gold will continue to rise.

Producers 

I prefer to trade equities rather than gold by itself. This is because it’s a different market and many producers are geared towards the spot price. 

There is the argument that you can lever yourself on gold itself, but no thank you. First of all, I don’t want to be levered something silly, and secondly, I like good risk/reward where I can have an edge. I wish someone luck in having an edge on gold itself. 

Goldplat

This is a stock that came onto my radar at the back end of last month. The RNS revealed that the business had performed higher than market expectations. This is usually a good sign for a stock to start trending, especially if it can ride an earnings…

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