The Gold Economy

Last week was an eventful week at home and abroad with several events directly showing up in the performance of global markets and the price of gold. On Friday, Egypt’s mayhem in the streets caused uncertainty in the markets, but sent gold shooting up over $21 to close at $1,336.75.

On Wednesday, a continuation of the Federal Reserve’s easy monetary policy pushed gold up double-digits. Earlier in the week, a small hedge fund that had overleveraged itself to gold futures blew out its position, causing the biggest ever one-day reduction in futures contracts for the Comex.

This small hedge

Gammon Gold is well on its way to becoming one of the premier gold mining companies in Mexico, especially after Capital Gold (CGC) in 2010 signed a definitive agreement to be acquired by Gammon. Not only does this winning combination provide Gammon with immediate production in both gold and some silver but also augments Gammon’s long-term growth profile in addition to increasing 2p reserves rather sharply.

Capital Gold Highlights The El Chanate mine alone will add an additional 50,000 ounces on top of the 70,000 it is currently producing by 2013 between 2 mines. 2P

As I noted in my previous article that the technicals and fundamentals say that SPDR Gold Shares (GLD) is a good buy, I will take this one step further and look for the best gold stock.

Below is a screen of gold stocks from Friday, January 29.

(Click to enlarge)

P/S = Price/Sales P/B = Price/Book P/C = Price/Cash

P/FCF = Price/Free Cash Flow EPS next Y = EPS growth next year

EPS past 5Y = EPS growth

By Brad Zigler

The crisis in Egypt really stirred up the gold market Friday. And why shouldn’t it? After all, there was a weekend — and a likelihood of increasing violence — ahead. On Monday morning, though, with the world markets open, the fear seemed to dissipate.

There’s a lot of fear premium embedded in gold’s price. Over the past three months, we’ve come to see the degree of volatility in that component. Now, there’s opinion aplenty explaining the weakness leading into Friday’s price spike. The truth is laid out in the numbers.

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