The price of gold and the stocks of the companies that mine it have been on a hot streak this year.
Bullion has rallied about 10% since the start of the year to US$1,322.90 an ounce, a nice rebound following a crushing 2013 that saw prices fall 28% — their first decline in 12 years and the worst loss since the 1980s. The S&P/TSX Global Gold Index, which holds 37 gold exploration and mining names, has also joined in on the party, climbing 26.8% since Dec. 31.
The performance of gold stocks is notable because they are posting better returns than the precious metal itself for one of the few times in the past decade.
Gold stocks have underperformed bullion for seven straight years, mainly due to rising costs, lower margins and the introduction of new exchange-traded products that have made investing in physical gold easier.
There’s no doubt gold…
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