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Use this key figure to find the best gold stocks to buy when the price of the yellow metal rises

by , 23 September 2015

The time may be nearing to buy gold stocks.

Gold stocks have had a very rough ride since the price of the yellow metal started its decent. This means there are a lot of gold producers trading at fantastic levels.

So how can you buy the best stocks on the market once the price of gold starts to climb?

Read on to find out…


The relationship between gold and stocks


Over the past few years, the price of gold has fallen hard. During this time, the prices of stocks have risen.

With global stock markets still showing high levels of volatility at the moment, if stock prices continue to fall, chances are the price of gold will rise.

And this will push the price of gold stocks higher.

So if you want to take advantage of this when it happens, you need to ensure you buy into the best gold stocks on the market. It’s not a case of investing in any gold stock.


How to find the best gold stocks


Gold mining is expensive. It comes with high production costs.

At the moment a low gold price is hitting many gold producers. Some gold producers are even running at a loss due to their high production costs.

This is why you need to pay close attention to one figure when investing in gold stocks. This is a gold producer’s all-in sustaining costs (AISC), Matt Badiali in The Crux explains.

AISC tells you how much money a gold producer needs per ounce of gold to operate. It includes exploration costs, mining costs and any administration costs.

By comparing the AISC with the average gold price for the past year, you can see how big or small a gold producer’s profit margin is.

This will show you the gold producers with the lowest costs. When the gold price rises, these gold stocks have much more profit making potential.

So there you have it. Use this key figure to find the best gold stocks to buy when the price of the yellow metal rises.

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Use this key figure to find the best gold stocks to buy when the price of the yellow metal rises
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