Gold stock analysis really becomes a popular topic when the price of gold start to reach new highs. You can analyze gold stocks as well as gold ETF's (Exchange Traded Funds) using the standard methods of either fundamental or technical analysis.
A key thing to keep in mind when analyzing gold mining stocks is their production costs. If all other factors between gold mining companies are equal it is wise to seek the company with the lowest production costs. The reason for this is faily obvious. As the price of gold rises mining companies are able to profit from the increasing difference between the price of gold and their fixed production costs.
When doing your analysis you should also keep in mind the advantages you have by emplying hedging strategies to assist you in offsetting your risk. Selling covered calls on gold stocks can effectively help protect you from some of the downside risk should the price of gold start to fall and the price of your gold stock starts to follow. Another effective hedging strategy would be to make use of a short gold ETF. By buying a short gold ETF your ETF will increase in value as the price of your gold stock decreases in value as the price of gold falls.
You can use many of the technical stock analysis techniques to trade either gold stocks or gold ETF's. As the price of gold can trend strongly some of the simplest techniques can get you in and keep you in a strong upward or downward movement in gold price.
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