ASX-listed gold miners have performed well in the first three months of 2015, a welcome change after a terrible year in 2014.
Shares in Newcrest Mining Limited (ASX: NCM) for example have climbed 25% so far this year, while shares in Northern Star Resources Ltd (ASX: NST) have rocketed an astronomical 62%.
However before deciding on whether to jump in and buy gold mining shares today, here are three things only the pros are talking about to arm yourself with:
1. ANZ reckons gold demand could double
According to the Australia and New Zealand Banking Group (ASX: ANZ) demand for gold will double by 2030, from 2,500 tons to 5,000 tons pa.
The growth will be driven by demand from Asia, especially Chinese investors, as incomes rise and the size of the middle class demographic grows. The increase in demand could push the gold price up to as much as US$2,400 per ounce compared to today's price of US$1,200. However, the bank still expects gold to face price volatility in the short term. The full report can be read here.
2. The price fixing phone calls are going to stop
Many gold investors will be aware that until recently the price of gold was set each day at about 3pm when five of the major international banks; Barclays, Deutsche Bank, HSBC, Scotiabank and Societe Generale, got together on a private conference call and set the price of gold.
Researchers believe the calls resulted in signs of gold price manipulation and collusion, but that is about to change as electronic auctions take over the job and banks submit their bids electronically like most other metal commodities.
3. Shares in Northern Star Resources Ltd are looking pricey
After exceptional financial performance in the last 12 months shares in Northern Star Resources Ltd (ASX: NST) have more than doubled, but are starting to look pricey. As a low cost miner the company is well positioned to benefit if the price of gold rises, but with a price-to-earnings ratio of 21 it does not look cheap against a background of volatile gold prices and compared to other growing ASX listed companies.
