Another day, another new high for gold. Today, gold hit a new high at $1,309 an
ounce, as investors buy every dip in price for the precious metal.
The reason for gold’s popularity are clear. A weak U.S. dollar, a promise of
more monetary stimulus from the Fed and an uncertain outlook for the U.S.
economy, along with currency weakening moves from Japan and England, have sent
investors clamoring for an asset that can protect the value of their
Current conditions underlying gold’s rise are not likely to end anytime soon.
And now, gold mining companies are starting to acquire other miners to maximize
their profits from high gold prices.
One gold mining stock is up 26% in two days after it rebuffed a buyout
offer from a competitor. With a forward P/E of just 11, it’s clear that the
offer was too low. And investors agreed, sending the stock higher in
anticipation of a higher bid.
Currently trading around $4.80 a share, a reasonable offer for this company,
which has one of the lowest cost structures in the industry, could be as high
as $6.50. That would represent another 35% gain for investors.