NEW YORK, NY--(Marketwire - Mar 28, 2013) - Gold mining stocks have largely underperformed gold prices over the past few years. Gold prices fell below $1,600 an ounce Tuesday as strong U.S. economic data and news of Cyprus' bailout deal tarnished the metals safe haven appeal to investors. The SPDR Gold Trust ETF (GLD) has fallen roughly 4.5 percent year-to-date, while the Market Vectors Gold Miners ETF (GDX) has fallen roughly 20 percent over the same period. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Yamana Gold Inc. (NYSE: AUY) (TSX: YRI) and NovaGold Resources Inc. (NYSE: NG) (TSX: NG).
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"Investors are not really looking for safe havens at the moment," Eugen Weinberg, head of Commodities research at Commerzbank, said to Reuters. "Gold as inflation protection should get more demand from investors in the second half of the year. Right now, the market participants are looking for more yield and they're finding it in other asset classes like equities."
While investment demand for gold has slid, purchases from central banks have experienced a steady rise. Gold purchases from central banks in 2012 totaled 534.6 tons, a 48-year high. Official gold reserves of global central banks have surged from $2 trillion in 2000 to over $12 trillion last year, according to a report issued by the World Gold Council.
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Yamana Gold has a diversified portfolio of assets providing sustainable gold production supported by a large resource base. With expansions at current operations and projects currently under development, production is targeted to increase by over 45 percent, from 2012 levels, to be at a sustainable level of approximately 1.75 million GEO beginning in 2014.
NOVAGOLD is focused on permitting and developing its 50%-owned flagship property, Donlin Gold, one of the world's largest known undeveloped gold deposits. Donlin Gold has approximately 39 million ounces of gold mineral resources, inclusive of mineral reserves (541 million tons at 2.24 g/t). The company announced it will release first quarter 2013 results on Wednesday, April 10th.
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