Amid a dramatic bull market trend of the sort that has characterized gold over the past decade, we can comfortably label a year in which bullion proxy SPDR Gold Trust
As 2011 draws to a close, gold and silver investors are receiving a poignant reminder of just how volatile and challenging the journey to precious-metal profits can be. While storm clouds grow darker over Europe's acute debt crisis, the U.S. dollar remains the ironic beacon of strength relative to a rapidly crumbling euro currency. Accordingly, gold and silver have snapped back violently, and on Wednesday morning gold collapsed through key technical levels as both the 200-day moving average and the $1,600 level failed to hold. Without intense buying activity in Asia, moreover, it is likely these prices would have dived lower still. Incredibly, Chinese gold imports reportedly surged by 4,000% in October over the prior-year mark to reach 85.7 tonnes!
But if you think gold's relatively meager outperformance of the benchmark S&P 500
And if you think bullion investors have had a rough ride through all the volatile action, you'll reel at the carnage in the trampled mining sector. The Market Vectors Gold Miners ETF
Hits and misses among my top picks for 2011
Around this time last year, I issued my top 10 stock picks for 2011 among the miners of gold and silver, but the sector's rough ride ensures this will not count among my best years of picking the winners. As a long-term, buy-and-hold investor, I am prepared to endure the occasional rough year, so long as the underlying investment thesis remains intact. In the case of gold and silver, I believe there can be little doubt that the conditions to support higher metal prices will continue to pile up even as this near-term sell-off dips deeper. In accordance with my unabashedly bullish stance toward precious metals, and my continuous tracking of the individual stocks I picked, I continue to personally own every stock on that list (except, of course, for Northgate Minerals, which was acquired by AuRico Gold
AuRico Gold (previously Gammon Gold) earned my highest recommendation for 2011 as a standout turnaround story in the making, and, indeed, the company achieved a remarkable run of strategic advances during 2011 through a pair of aggressive gold acquisitions. Despite a deep pullback during the second half of the year, the stock remains ahead of the S&P 500 by nearly 7% and is outpacing the GDX by more than 16%. At its year-to-date peak, AuRico logged a 73% advance that I hope provided some benefit to my readers. As AuRico's recently acquired Young-Davidson mine comes into production during 2012, I look for AuRico to regain its growth momentum in convincing fashion.
I selected AuRico acquisition target Northgate Minerals as my No. 2 pick for 2011. Since it was clear to me that the market failed to comprehend the full value of the Young-Davidson project, I am pleased that AuRico did and that Northgate's Toronto-listed shares advanced some 17% in 2011 before trading ceased in late October.
There is no way to sugarcoat it: My No. 3 selection of Brigus Gold
My No. 4 selection was another standout winner, as Yamana Gold
Silver miner Coeur d'Alene Mines
Fellow silver miner Alexco Resource
Great Panther Silver
Peering toward 2012
Later this month, I will be issuing a fresh round of top picks among the miners of gold and silver, and I invite Fools to review my selections as the relevant articles are posted here. I suspect that a few of the names discussed above may vie for a position on the list for 2012, but I am mulling a range of candidates that I have not previously discussed at length. If you join me in thinking that quality miners of gold and silver will surge once again following this relatively dreadful performance in 2011, then take a moment to add these and other stocks to your watchlist using the links provided below. While, of course, it is possible for weakness in gold and silver to persist in the near term as Europe's crisis foments a stampede into the U.S. dollar, I urge Fools to hone their focus upon the gold- and silver-supporting scenarios that follow thereafter.
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Agnico-Eagle Mines, Alexco Resource, AuRico Gold, Brigus Gold, Coeur d'Alene Mines, Great Panther Silver, Primero Mining, Rubicon Minerals, and Taseko Mines. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.