Show Gold Stocks-Good Earlier this year stocks of leading gold mining companies puLon a sparkling performance in the stock moving impressively higher after a long period of The trigger of the spiral In gold prices in world with the price advance at least temporarily profit taking has reduced the value of gold stocks by about 20 to 30 percent from 1973 Investors holding gold stocks purchased at lower levels may continue to retain them as a long-term hedge against possible further erosion of paper WHILE the recent decline in the price of gold stocks may appear to open up an opportunity for investors once again to get aboard the gold-bug we suggest that even at present levels these issues offer some downside This is a difficult group in which to engage in short-term trading since it is especially susceptible to market Before the run-up in the price of the principal demand for the yellow metal was from industrial and artistic sources-both fairly predictable one answer to the question of how to hedge against inflation was gold it was then fairly easy to make a case for a long-pull upward trend in gold But in view of the upward surge of gold prices in the free markets in recent the rules of the game must be It has become increasingly difficult to project future movements in the price of now that international factors have made gold highly vulnerable to these erratic moves are reflected in the price of gold mining Some swings in gold quotes relate to rising interest rates as speculators take profits in gold to in money market instruments such as bank certificates of deposit or Other variables in the gold picture include the attitude of large gold holders and whose sales of the precious metal can have considerable Impact on day-today gold South Africa is the largest while the Soviet Union also produces and holds large quantities of AMONG uncertain future variables affecting gold are the possible action of the central the pace of and the effect on demand if Americans can again freely own Since 1934 U.S. citizens have been forbidden by law to own or trade in gold as an with such potential for wide price gold stocks appear desirable only as a long-term holding at this FOR investors who have taken profits in gold stocks or are eyeing the group for possible it may be preferable to examine other areas of the market for With interest rates at near-historic a could be at Slight further advance is possible but some easing is more This could rare opportunities in several In the bond market near-record low prices mean very high And when interest rates this will bring higher bond prices and capital appreciation for IN COMMON stocks the money-rate-sensitive utility issues offer impressive yields in some As rates these will provide capital but this is rather a psychological plus since utility problems are not just In this income continues to be the main The Research Department of Babson's Reports has always advised investors to tailor their portfolios to individual But at this time we feel that-for most-gold stocks may be held for the long term but should not be acquired for short-span trading |