Take A Look At Barrick Gold – ABX
Barrick Gold is the worlds largest gold company. They have just unwound their gold hedges and are expanding their operations worldwide. With the price of Gold hitting new highs it pays to look at the 800 pound gorilla in the room. Here is a 10 year chart of ABX. It looks like a large kite with a tail. ABX uptrended slowly until the middle of 2007 when it took off and ran to a new high of $54.74. It then quickly sold off to a low of $17.27 and has steadily moved up to its current price of $40.12. Since mid 2007 ABX has been trading in a gigantic diamond formation with the lower half almost a mirror image of the upper half. The low to high price of this pattern is $54.74 – $17.27 = $37.47. If we multiply $37.47 by 2 we obtain a price target of $74.94. Since gold miners have been lagging the price of gold they have plenty of room to catch up especially with the price of gold rising. A doubling of ABX in price from current levels does not seem unreasonable.
