Is it a good time to invest in gold stocks?
Evolution Mining and Fortescue Metals has been referenced a few times by Julia Lee in your interviews. What is your view and preference?
A: I am no gold bull, but a lot of people are and it is definitely in an uptrend (in US dollars). They argue that 0% interest rates, Central Banks printing money and USA/China tensions will see gold maintain its “safe-haven” status and generate ongoing demand.
My advice to gold bulls is just to buy the GOLD ETF (the ASX code is GOLD). Only two risks – gold price and the Aussie dollar. If you want to leverage and take 4 risks (gold price, Aussie dollar and cost/volume of production), buy gold shares. Evolution Mining is a good mid-tier miner. Analysts, however, think it is over-priced with a consensus target price of $4.88 compared with a last market price of $5.85.
Fortescue (FMG) is in iron ore.