Gold Sector Remains Favorite of Corporate Insiders

Tuesday, 22 January 2013
Written by  The Globe and Mail
Published in Gold Investing
Even though gold stocks have recently been returning little to nothing big for investors, that hasn’t stopped corporate insiders from purchasing precious metals. As a matter of fact, precious metals have now eclipsed industrial metals as the stock group on the TSX with the highest insider buying sentiment. This data comes to us from INK Research, which tracks the buying and selling activity by executives and directors within their own businesses.

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INK's precious metals and minerals indicator is now at 389 per cent, up from 321 per cent in mid-December. A reading of 400 per cent would signify there are four stocks with key insider buying for every one with selling. The specialty mining and metals indicator, which tends to be industrial-focused stocks, is sitting at 278 per cent.

INK is throwing out some interesting research numbers. These numbers prove that gold, even when in down times, is still one of the strongest, if not the strongest, sources of investments for traders and collectors. This has to do with the fact that people believe in gold and it is still so highly sought after, even when the yellow metal falls in price some. It is only a matter of time before gold moves back up in price. Remember, gold is still gold, and people will always be interested in it as an investment.

Gold company insiders may be gaining more confidence given signals that Japan will embark on aggressive monetary easing with its new prime minister, Shinzo Abe, in charge. The Japanese Finance Ministry announced earlier this month that it would be buying euro zone bailout debt, helping to devalue the yen. Continued Asian purchases of European and U.S. debt will help keep bond yields in developed markets low, making sovereign debt less attractive relative to gold.

With Japan stepping up and into the game to become more of a player, we can see how people are getting more excited. Combine this with the ongoing interest in gold from China, as well as India’s renewed interest, and you have the makings of quite a year for gold in 2013.

While certain things will need to fall in place for gold to make a run at the much hyped and anticipated $2,000 per ounce price mark, the fact of the matter is that many expect gold to make a run at that mark in 2013, or at least get close to it.

Original Article: The Globe and Mail

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