Analysts said that gold mining and jewellery stocks offer a leverage play to gold prices and tend to amplify the strength in gold prices. Shares of Canada-based Barrick Gold Corp., the world’s largest gold mining company, have gained 174.3% since 1 January on the Toronto Stock Exchange. Earlier, RBI had capped the loan-to-value ratio at 60% and this had hurt profitability at a time of falling gold prices. Shares of Indian gold exploration and mining company Deccan Gold Mines Ltd (DGML) have nearly doubled from the start of this current year to close at Rs.68.15 on Wednesday. Thus, if this is indeed the beginning of a significant uptrend in gold mining stocks—which we assume to be the case—there should still be a great deal of upside potential,” Stoeferle said.

Source: Mint July 21, 2016 05:28 UTC