How Gold's 2013 Bloodbath Affected Stocks

Michael Teague |

With the Standard & Poor’s 500 index up nearly 30 percent in 2013, and the Dow Jones Industrial Average not far behind on a gain of 26.50 percent, there is no question that the sharp acceleration in the nearly five-year old bull market has been a bonanza for stocks.

But the spectacular gains for equities over the recently-ended year was accompanied by the inverse but no less spectacular decline of the price of gold. Indeed, the traditional safe-haven investment began 2013 at just shy of $1,700 per ounce, losing some $500 by the close of the last trading session on Dec. 31 to beneath $1,200 per ounce.

Many factors have no doubt contributed to this precipitous decline, such as the near-catastrophic banking crisis in Cyprus earlier in the year. Perhaps most significant of these by far, however, has been the Fed’s support of the economy through a massive fiscal stimulus program, one that has kept interest rates artificially low, removing a great chunk of the perceived risk typically associated with equity markets.

Gold’s bloodbath of a year has understandably been accompanied by a great deal of attention in financial media, and the general tone of much of this commentary has been one of crisis and disaster. The yellow metal has even been pronounced dead on numerous occasions, though there are many who have rightly pointed out that this is an overstatement at best. Some of the sharpest commodities analysts and investors, such as Rick Rule and Doug Casey, have convincingly argued that now is precisely the moment at which investors should be buying gold, given the enormous discount at which it can be purchased at the moment.

The path ahead for precious metals in general is likely to remain a rough one however, particularly from the perspective of gold equity plays. Along with the decline in gold prices, gold stocks, every single one of them with the exception of the jeweler Kingold Jewelry, Inc. (KGJI) , have taken substantial losses throughout the year.

The following are the stocks, listed by market-cap, that had the worst time in 2013.

 

Large-Caps

Newmont Mining Corp. (NEM)

Market-Cap: $11.47 billion

Price: $24.05

2013 Loss: -49 percent

Barrick Gold Corporation (ABX)

Market-Cap: $17.65 billion

Price: $18.32

2013 Loss: -48.50 percent

Goldcorp Inc. (GG)

Market-Cap: $17.60 billion

Price: $22.67

2013 Loss: -39.65 percent

 

Mid-Caps

Gold Fields Ltd. (GFI)

Market-Cap: $2.35 billion

Price: $3.24

2013 Loss: -70 percent



Compania de Minas Buenaventura SA (BVN)

Market-Cap: $2.85 billion

Price: $11.44

2013 Loss: -68 percent

AngloGold Ashanti Ltd. (AU)

Market-Cap: $4.57 billion

Price: $12.17

2013 Loss: -62.50 percent

 

Small-Caps

Allied Nevada Gold Corp. (ANV)

Market-Cap: $370.68 million

Price: $3.80

2013 Loss: -88 percent

Harmony Gold Mining Co. Inc. (HMY)

Market-Cap: $1.09 billion

Price: $2.58

2013 Loss: -71.50 percent

IAMGOLD Corp. (IAG)

Market-Cap: $1.25 billion

Price: $3.46

2013 Loss: -69 percent

 

Micro-Caps

Banro Corporation (BAA)

Market-Cap: $133.45 million

Price: $0.61

2013 Loss: -80 percent

Golden Star Resources (GSS)

Market-Cap: $114 million

Price: $0.49

2013 Loss: -76 percent

Gold Resource Corp. (GORO)

Market-Cap: $245.54 million

Price: $4.62

2013 Loss: -69 percent

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
BAA BANRO CORPORATION 0.12 0.00 1.06 467,540
GORO Gold Resource Corporation 4.53 0.09 2.03 719,846
GSS Golden Star Resources Ltd 0.86 0.02 2.89 1,024,119
IAG Iamgold Corporation 3.96 0.07 1.80 6,583,400 Trade
BVN Buenaventura Mining Company Inc. 12.61 0.12 0.96 835,812 Trade
GG Goldcorp Inc. 16.05 0.21 1.33 8,142,527 Trade
GFI Gold Fields Limited American Depositary Shares 3.64 0.12 3.41 4,898,913 Trade
ABX Barrick Gold Corporation 19.60 0.39 2.03 10,212,226 Trade
AU AngloGold Ashanti Limited 11.39 0.29 2.61 2,833,582 Trade
HMY Harmony Gold Mining Company Limited 2.49 0.09 3.75 4,257,506 Trade
NEM Newmont Mining Corporation 33.91 0.43 1.28 8,041,100 Trade
EQSE Equipment & Sys Engrg Inc n/a n/a n/a 0

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