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3 Gold Shares Rising Strongly

LONDON -- The price of gold traded in a narrow range last week, with gold for June delivery falling just 0.8% to end the week at $1,597 per ounce. In U.S. trading on Monday, gold rose to $1,599 per ounce.

Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $63 billion SPDR Gold Trust (NYSEMKT: GLD  ) , slipped 0.6% to close at $154.67 yesterday, while London-listed Gold Bullion Securities (LSE: GBS  ) fell 0.8% to $153.88 last week. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 4.1%, while the value of SPDR Gold Trust shares has fallen by 4.5%.

Gold's big movers
Many investors prefer to invest in gold-mining stocks rather than gold itself, as gold miners are able to use their operational gearing to outperform the price of gold. Let's take a look at three gold stocks that outperformed the yellow metal last week.

Randgold Resources (LSE: RRS  ) rose 3.7% to 5,695 pence last week after announcing that its attributable mineral reserve ounces rose by 80,320 to 16.36 million last year despite record production of 794,844 ounces of gold. Randgold's reserves were calculated using a gold price of $1,000 per ounce to determine their commercial viability. This is substantially below the current gold price of $1,600 per ounce, suggesting that the FTSE 100 miner could continue to mine profitably at much lower gold prices. The grade of Randgold Resources' reserves also improved slightly, rising from 3.84 grams per tonne to 3.87 grams per tonne.

Chaarat Gold (LSE: CGH  ) rose 4.1% to 23.75 pence last week, consolidating a 19% gain so far this year. Last week's firmer gold price helped boost sentiment for smaller gold-miners, while Chaarat investors may also have been reacting to the previous week's news that production at Chaarat's Tulkubash project in the Kyrgyz Republic remains on course to start in the second half of 2013 but will now use a cheaper heap-leach method, rather than the planned carbon-in-leach method. Chaarat also said gold resources at Tulkubash had increased to 5.76 million ounces as a result of last year's drilling program.

Primero Mining (NYSE: PPP  ) has climbed 18.1% to $6.73 over the last month. The company reported a 31% increase in its gold reserves for its San Dimas mine last month, taking its probable gold mineral reserves to 660,300 ounces and lifting its indicated gold resources to 779,600 ounces. The increases were driven by the discovery of two new high-grade veins in the Sinaloa Graben exploration area and have enabled Primero to increase production to 2,500 tonnes of ore per day.

Shares versus commodities
Shares in commodity companies have outperformed their underlying commodities many times over the last 10 years thanks to their ability to magnify their gains through successful development of new resources. This free report from the Fool, "10 Steps To Making A Million From The Market," contains some excellent tips on identifying and investing in potential multibagger shares, including resource shares like gold miners. I strongly recommend that you click here and download it now, as it will only be available for a limited time.

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Related Tickers

9/23/2016 11:35 AM
CGH $6.18 Down -0.17 -2.68%
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PPP $1.64 Down -0.03 -1.80%
Primero Mining CAPS Rating: ***
RRS $7904.47 Down -110.53 -1.38%
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SPDR Gold Trust CAPS Rating: **