Metal Stocks That Gained During Market Correction

NEW YORK (TheStreet) - The S&P 500 Index declined 13.7% from its recent peak on April 23 to the recent low on June 7. During this period, only 16 of the major metal and mining stocks registered gains, in the range of 1.7% to 39.9%.

Gold stocks were the clear winners for safe-haven reason on concerns related to the European debt crisis. On the COMEX, gold for spot delivery was up 7.14%, while silver for spot delivery was down 0.90% during this period.

Gerdau Ameristeel(GNA) led the pack of metal and mining stocks advancing 39.9% during the period. However, the stock's gain is attributed to the 54.4% jump on June 2 alone, on Gerdau SA's(GGB)proposal to acquire a minority stake in the company.

US Gold(UXG), Eldorado Gold(EGO), Compania de Minas Buenaventura(BVN), and New Gold(NGD) registered double-digit gains of 22.2%, 21.9%, 15.7% and 10.4%, respectively.

Currently, US gold is trading at 52-week highs. The stock provided a risk-adjusted return of 52.1% over the past six months as per the methodology we used. Meanwhile, New Gold provided a risk-adjusted return of 48.3% during the past six months.

Eldorado stocks gained on the gold commodity's rise and partly on the management's production guidance. Early May, the company increased fiscal 2010 gold production guidance range to 575,000-625,000 ounces from the earlier 550,000-600,000 ounces announced during the third week of March. Early May, Compania de Minas Buenaventura, in partnership with Gold Fields(GFI), announced a major gold discovery in Southern Peru.

During the April 23-June 7 period, gold giants Barrick Gold(ABX), Goldcorp(GG), and Newmont Mining(NEM) were up 7.8%, 9.3%, and 3.9%, respectively. Overall, risk-averse investors preferred these large-cap stocks to small-cap stocks, which are more volatile (and hence more risky) than the large-cap stocks.

Gold ADRs AngloGold Ashanti(AU), Randgold Resources(GOLD), Gold Fields and Harmony Gold Mining(HMY) gained 7.8%, 5.3%, 3.6% and 1.7%, respectively.

Other gold producers IAMGOLD(IAG), Yamana Gold(AUY), and Royal Gold(RGLD) gained 4.7%, 3.6%, and 2.8% of their respective market values during the Apr 23-June 07 period.

Our top silver stock pick for months, Silver Wheaton(SLW) gained 3.3% during the period, while the white metal for spot delivery declined 0.90%.

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