Gold Miners: Is the Gold Bull Market Going to End in 2012?

Gold rallied for the first time in more than a week, poised to complete its 11th consecutive annual gain.

Gains by the dollar against the euro had curbed demand for gold, bringing it its lowest price since July 7. Bloomberg reports the proceeding rally is from speculation low prices will spur demand from global investors and jewelers in India in the first quarter of 2012.

“While we haven’t seen physical demand pick up yet, maybe people are anticipating it for next year,” Marc Ground, a commodities strategist at Standard Bank Plc, said in a telephone interview with Bloomberg. “January and February are usually good months in India, and a lower gold price might attract some buyers.”

Gold is up 8.4% this year. As of 11:40AM Dec. 30 gold trading at $1,579.67 per ounce, still well below its Sept. 6 record of $1,923.70.

Next Year

This end-of-the-year rally has sent mixed signals about what to expect for gold prices in 2012. Bloomberg reports investors are now thinking that gold is oversold: “Holding of gold in exchange-traded products are climbing for the first time in three weeks… Assets rose 0.3 percent this week after falling 1.5 percent the previous two weeks.”

Meanwhile, investor billionaire George Soros is of the opinion gold is the “ultimate asset bubble,” and cut 99% of his holdings in the first quarter of 2011, Securities and Exchange Commission data show.

Business Section: Investing Ideas

Gold prices have shown big gains over recent years, but will their winning streaks continue?

For ideas, we collected data on institutional money flows, and identified 10 gold mining stocks that have seen significant institutional buying during the current quarter.

Big money managers have extensive resources to analyze investing ideas. So if they’re buying a certain stock, it’s worth paying close attention.

Do you agree with this bullish sentiment? Use this list as a starting point for your own analysis.

List sorted by market cap.

1. Kinross Gold Corporation (KGC, Earnings, Analysts, Financials): Engages in mining and processing gold ores. Net institutional purchases in the current quarter at 36.5M shares, which represents about 3.23% of the company’s float of 1.13B shares.

2. AuRico Gold Inc. Ordinary Share (AUQ, Earnings, Analysts, Financials): Engages in the exploration, development, and production of gold and silver mines and projects in Mexico. Net institutional purchases in the current quarter at 12.0M shares, which represents about 4.28% of the company’s float of 280.22M shares.

3. NovaGold Resources Inc. (NG, Earnings, Analysts, Financials): Engages in the exploration and development of mineral properties primarily in North America. Net institutional purchases in the current quarter at 20.7M shares, which represents about 12.49% of the company’s float of 165.68M shares.

4. Aurizon Mines Ltd. (AZK, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and operation of gold properties in North America. Net institutional purchases in the current quarter at 8.5M shares, which represents about 5.27% of the company’s float of 161.36M shares.

5. Jaguar Mining Inc. (JAG, Earnings, Analysts, Financials): Engages in the production of gold, as well as in the acquisition, exploration, development, and operation of gold mineral properties in Brazil. Net institutional purchases in the current quarter at 5.0M shares, which represents about 6.81% of the company’s float of 73.37M shares.

6. Lake Shore Gold Corp Ordinary S (LSG, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of gold properties in northern Ontario and Quebec of Canada, as well as in Mexico. Net institutional purchases in the current quarter at 125.9M shares, which represents about 33.42% of the company’s float of 376.73M shares.

7. Richmont Mines Inc. (RIC, Earnings, Analysts, Financials): Engages in the acquisition, exploration, development, and operation of mining properties, principally gold in northeast Canada. Net institutional purchases in the current quarter at 1.6M shares, which represents about 5.54% of the company’s float of 28.90M shares.

8. Midway Gold Corp. (MDW, Earnings, Analysts, Financials): Engages in the acquisition, exploration, and development of mineral properties in North America. Net institutional purchases in the current quarter at 3.0M shares, which represents about 3.83% of the company’s float of 78.26M shares.

9. Tanzanian Royalty Exploration Corp. (TRX, Earnings, Analysts, Financials): Engages in the acquisition and exploration of mineral properties in Africa. Net institutional purchases in the current quarter at 5.1M shares, which represents about 5.25% of the company’s float of 97.17M shares.

10. Vista Gold Corp. (VGZ, Earnings, Analysts, Financials): Engages in the evaluation, acquisition, exploration, and advancement of gold exploration and development projects in Australia, North America, and Indonesia. Net institutional purchases in the current quarter at 4.4M shares, which represents about 7.02% of the company’s float of 62.71M shares.

(List compiled by Eben Esterhuizen, CFA)

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