Gold for Cash for More Gold: Junior Gold Producers Rising to the Occasion

With increasing volatility in the US dollar, the gold bugs are licking their lips at the possible gains on the horizon for their yellow wealth. Despite the current run up of gold prices, there’s a mixed blessing in store for the gold miners as equity valuations have significantly lagged the performance of the underlying commodity.

Case in point: Barrick Gold [ABX – TSX] saw its 52-week low come on June 17 of this year, despite the fact that gold had only recently powered through the $1500 threshold. While the equity prices have not reflected the run up in gold prices the cash positions on these large caps continue to bulge. With the current market selloff, acquisition targets are becoming increasingly cheaper. M&A activity is surely to follow.

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