NEW YORK ( TheStreet ) -- As markets are slammed with volatility and fears of a double-dip recession persist, gold stocks are poised to prove themselves as a moderately safe place to stash cash. Gold stocks can, no doubt, be volatile, as they are subject to geopolitical issues and a constantly churning gold price. That said, many analysts believe the gold sector is undervalued and poised for a comeback. Gold miners have had a hard time providing the expected leverage of 2:1 or even 3:1 vs. the price of bullion. Since the end of 2008 the gold price has rallied more than 73.5%, but the Market Vectors Gold Miners ( GDX) is up just 56%. The crème de la crème of gold stocks, Barrick Gold ( ABX), rallied a meager 18.9% while growth stocks like Randgold ( GOLD) added 83.3%. More speculative plays like NovaGold ( NG) jumped 514.2%, but even that kind of dramatic leverage is dissipating.
Peru, for example, elected a nationalist president, Ollanta Humala, on June 15. Humala favors high mining taxes to return money to the Peruvians and there is speculation that he may go so far as to nationalize mines. Ayer believes that the president isn't going to come into office and change all the economic policies, especially because Peru has the highest growth rate of any nation in South America, according to his calculations. "What they have in place is working ...
|More on Gold Gold Price News|
|How to Invest in Gold|