Five Gold Stocks to Sell Now...Maybe

Of course, if you have read some of my other articles especially the one entitled, “Trade Stocks Like Jesse Livermore” and wanted to buy these stocks, you should have invested a little then and watched to see what the stocks would do. You likely would have even sold as the stocks declined during the summer and purchased at lower levels. During the summer months, you could have gotten:

GG at 33

NEM at 38

ABX at 32

KGC at 17

AUY at 8.50

This is an updated article based upon my previous article, “Five Gold Stocks to Buy Now.” The article was published on 5/28/2009 and discussed five of my favorite gold stocks. I owned two of the stocks at the time (still do) and had owned two others in the past. Had you bought the five gold stocks at the close on May 28^th, 2009, this is what you would have owned:

Goldcorp (GG) at 38.78

Newmont Mining (NEM) at 47.35

Barrick Gold (ABX) at 37.18

Kinross Gold (KGC) at 19.52

Yamana Gold (AUY) at 11.14

I was fortunate in that I was able to pick additional GG shares on 6/15 at 34, 6/22 at 33.35 and 6/23 at 32.50. My initial purchase of AUY came on 5/21 at 10.42 with additional shares purchased on 6/11 at 10 and 6/15 at 8.95. These stocks have had quite a run closing Friday, September 4, 2009 at:

GG closed at 41.55 up 7.1% from May 28^th and up 25.9% from summer

NEM closed at 46.23 down 2.4% from May 28^th and up 21.6% from summer

ABX closed at 40.04 up 7.7% from May 28^th and up 25.1% from summer

KGC closed at 21.88 up 12.1% from May 28^th and up 28.7% from summer

AUY closed at 10.63 down 4.6% from May 28^th and up 25% from summer

Today we see that the gold price is up a little but the stocks are down for the most part.  This has me somewhat concerned.  Furthermore, the spot gold price did not hold above $1000 per ounce for long today.  Failure to hold this price could allow gold to fall to $975 or even the $950 range which would be trouble for gold stocks.  I would consider selling part of my position now.  That is exactly what I did near the open this morning.  I managed to sell some of my GG shares at $43.14 and sold some Oct 11 calls on AUY this morning at $1.05 per share.

By selling some of your shares now, you can get cash to repurchase when the price dips.  But, don’t sell everything in case the price turns around.  Gold tends to do well in September, dips a little in October and then increases gradually throughout the winter.  That is just the typical performance and by no means a guarantee that it will happen this year.  That is why I would just sell a portion now and buy back if gold dips to the mid 900’s.  Trading around a core position like this can be very profitable.