Has Gold Finally Bottomed?

Gold

Gold has taken a beating and just hit its lowest value in 2012.  Could now be the time to bet on a comeback?
If you are in the camp that believes gold can return to greatness your weapons of choice should be the SPDR Gold Trust (ETF) (NYSEARCA:GLD), Goldcorp Inc. (USA) (NYSE:GG) and Yamana Gold Inc. (USA) (NYSE:AUY).

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GLD

GG

AUY


Gold prices hit a new low yesterday on the heels of the EU crisis with Greece and France taking center stage.  As a result the SPDR Gold Trust (GLD) is 7% away from its 12 month low and Goldcorp is worse off trading 5% away from its 52-week low. Yamana (AUY) is the wildcard of the bunch with it shares trading at $13.76 less than 20% from its 12 month low.

Both Yamana and Goldcorp pay a small annual dividend yield, 1.6% and 1.5% respectively. The GLD does not pay a dividend and its lost all of its gains for 2012.  As investors buy up dollars, they are dumping gold and it shows in the GLD and gold miners such as Yamana and Goldcorp. One look at the GLD chart and the opportunity is apparent for a make or break scenario.

The GLS is 6% away from its 200 day moving average and 4% from its 50 day moving average.  The trend is gold could keep falling however its daring to assume the bearish run can continue.  Today gold prices finally rebounded so the bottom could have been felt on May 9th.  We now deal with the resistance at the psychological level of $1,600.  Could the bargain hunters finally be ready to buy up gold and stop the decline?

Bottom line:

The flood into dollars won't last forever and gold will find its shine again.  Its an opportune time to look into the GLD and gold miners when you consider you are buying near the lows.

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