In a previous post on The Dividend Pig, I discussed opportunity in the Canadian mining sector. As I discussed in that post, many investors overlook mining stocks as dividend growth companies, because of their lower dividend yields. Yet these are “dividend growth” companies many with strong balance sheets. They have recently raised their dividends, and have more potential for share price increase. Take Potash Corp. (POT) as an example which recently raised its dividend by a whopping 33%! In that post I specifically discussed Barrick Gold (ABX), Goldcorp (G), Potash Corp. (POT), and Teck Resources (TCK.B).  As mentioned, Teck and Potash were at the top of my shopping list. The Gold Selloff, Market Corrections, and Panic Selling On Monday morning April 15th, I noticed the TSX Composite Index was down some -321 points (- 2.7%).  Of course markets have had a good run-up since June 2012. Both the DOW and TSX advanced to their 2013 highs. Both markets were due for a correction at some point. ...

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Back in April I wrote an interesting post asking the question Are Gold Stocks Cheap?  In that post I looked at the two leading gold producers, Barrick Gold (ABX), and Goldcorp Inc. (G). Both these multi-billion dollar companies trade on the TSX, but they are by production tonnes and profit, the world’s leading gold miners and gold producers. They generally have solid fundamentals, low debt, and pay a dividend. Like most mining companies the dividend yield is lower.  Many low dividend yield stocks have tremendous potential for capital growth that far outweighs the yield. ABX and G together make up nearly 5.5% of one of Canada’s most popular ETFs XIC.  These two gold producers also make up Canada’s most popular ETF, XIU. Approximately 6% of XIU is composed of Barrick and Goldcorp. You can add on another 2% onto both these ETFs for the other gold producers such as Yamana Gold Inc. and Kinross etc. You may have no desire to invest in gold producers. But if you are investing in Canadian ...

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The World’s largest gold bar is on display in Japan at the Toi Gold Museum . It was manufactured by the Mitsubishi Materials Corporation, and went on display at the museum in 2005. The Toi Gold Bar weighs a massive 250kg, or some 8037.686 troy ounces. At today’s current spot price of $1610.30 USD per troy ounce, the Toi Gold Bar is worth some $12.9 million dollars (USD). That is one massive currency hedge! The standard gold bar held and traded internationally by central banks and bullion dealers is the Good Delivery bar with a 400 oz. nominal weight (from Wikipedia). Its current value at $1610 USD per troy ounce is $644,000 dollars (USD). When countries store gold reserves, they are using the 400 oz. Bar. For individual investors, gold producers also forge 1kg gold bars, the equivalent of 32.15074656 troy ounces. At today’s post price of $1610 USD per troy ounce, a 1kg gold bar is valued at $51,772 dollars (USD). Gold bars are also available in 500 and 100 gram denominations. For ...

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In a previous post, Are Gold Stocks Cheap, I looked at two of the world’s leading gold producers Barrick (ABX) and Goldcorp Inc (G).  Both of these companies trade on the TSX and are the world’s leading gold producers. In that post I examined that the price of gold bullion and the share value of gold producers are not always correlated. In fact, the price of gold producers and the price of gold are currently inversely correlated (see chart below). I covered a couple of the possible reasons why in that post. While gold producers may be a bargain at these price levels, it does not necessarily mean that they are a replacement for buying the metal itself. In other words, gold bullion and gold producers have become very different types of investments. But it wasn’t always that way. In times of economic uncertainty investors bought the shares of gold producers as well as gold bullion. ABX versus SPDR GLD ETF (2 year chart) When you buy a gold producer such as Barrick or Goldcorp Inc. you ...

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As a dividend investor, I certainly would never have considered gold stocks as a possible investment for my portfolio. In fact I haven’t even invested in gold, and have missed the big run-up in gold bullion over the last few years. I’ve always considered gold and gold stocks as speculative investments to be avoided. However the price of gold bullion and the share value of gold producers are not always correlated. Currently gold is only 7% off its March highs, with a troy ounce of gold currently trading at $1662 USD. Conversely, the world’s two largest gold producers by market cap, Barrick Gold Corp. (ABX) and Goldcorp Inc. (G), have been steadily declining in share price and are trading only 10% above their 3-year lows. In other words the price of gold and the price of gold producers are currently inversely-correlated. What’s going on, is there a bargain to be had in gold stocks? The Fundamentals Are Solid Barrick and Goldcorp are not junior exploration companies or penny stocks, ...

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