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- By Alberto Abaterusso
A boost in interest rates often means bad news for gold, but it appears that investors can set aside any immediate fears as gold prices continue their steady climb. The precious metal hit its third highest level over 52 weeks at $1,314.90 per troy ounce on the London Bullion Market. That is as of Thursday, Jan. 3. On average, the bullion is up $56.35 per troy ounce compared to 2017.
Where is gold heading in 2018? Analysts see the yellow metal averaging $1,320 - $1,325 per troy ounce on the London Bullion Market. In addition, there are several factors at work that point to a favorable performance. I believe the dollar"s weakness make gold increasingly attractive. The market"s current high stock valuations will likely experience a correction in 2018. And, analysts are predicting two interest hikes for 2018. That is fewer than the three forecasted by the Federal Reserve Bank. Investing in the bullion is not the only option for investors who want to shield their wealth from inflation, which is anticipated to reach moderate levels. Investors also can gain exposure to gold by investing in its producers. Investors, for example, may acquire stakes in the publicly traded gold mining companies or through the VanEck Vectors Gold Miners ETF (GDX). Among the publicly traded miners, I would opt for Iamgold Corp (IAG) because this stock is characterized by a higher gold beta than its peers. I also see some catalysts that may trigger the stock to skyrocket. The high volatility that characterizes Iamgold with regard to changes in the price of the precious metal can be easily found in the chart below. In the chart, the Canadian mid-tier gold stock is compared with the Comex (Gold Futures) and the NYSE ARCA GOLD BUGS INDEX (HUI) over the last 3 years: Source: Yahoo Finance Investors may also want to pay special attention to the Canadian miner"s next earnings announcement. It is expected to take place between the third and fourth week of February. The bullion averaged $1,274.28 an ounce in fourth quarter 2017, and therefore it"s likely that the mid-tier producer will exceed consensus on Earnings Per Share again. A positive surprise of more than 400% will certainly have a significant impact on the market value of Iamgold on the New York Stock Exchange. Consensus is for an Earnings Per Share of 2 cents (U.S. dollars) and revenue of approximately $273 million, an increase of 8.10% percent over the year. Disclosure: I have no positions in any securities mentioned in this article. This article first appeared on GuruFocus.
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IAMGOLD Corporation
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PRODUCER |
CODE : IMG.TO |
ISIN : CA4509131088 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
IAMGOLD is a gold producing company based in Canada. IAMGOLD produces gold, diamonds, lead, niobium, rare earth, silver and zinc in Botswana, in Canada, in Ecuador, in Ghana, in Guyana, in Indonesia, in Mali, in Peru, in South Africa, in Suriname and in Tanzania, develops gold in Burkina Faso, in Ecuador and in French Guyana, and holds various exploration projects in Canada, in Ecuador, in Honduras, in Peru and in South Africa. Its main assets in production are OMAI MINE in Guyana, MOUSKA MINE, PORCUPINE, SLEEPING GIANT, DOYON, NIOBEC and GRAND DUC in Canada, YATELA and SADIOLA in Mali, MUPANE in Botswana, DAMANG PROJECT, TARKWA and TEBEREBIE in Ghana, ROSEBEL in Suriname, ZARUMA in Ecuador, ARDO MINE in South Africa, BUCKREEF in Tanzania, RAWAS GOLD PROJECT in Indonesia and TAMBORAQUE in Peru, its main assets in development are ESSAKANE in Burkina Faso, CAMP CAIMAN in French Guyana and QUIMSACOCHA PROJECT in Ecuador and its main exploration properties are BAMBADJI in Senegal, TEX-SOL, LESPERANCE, CREVIER and WESTWOOD in Canada, ALAMOUTALA (SADIOLA II) and SIRIBAYA in Mali, GILT EDGE MINE & ANCHOR HILL in Ecuador, PODEROSA MINE in Peru and VUELTAS DEL RIO / EL ZAPOTAL in Honduras. IAMGOLD is listed in Australia, in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 2.4 billions as of today (US$ 1.7 billions, € 1.6 billions). Its stock quote reached its highest recent level on April 28, 2006 at CA$ 9.98, and its lowest recent point on September 30, 2022 at CA$ 1.27. IAMGOLD has 464 620 000 shares outstanding. |