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« Hecla Mining: Bought Call Options Today! | Main | A review of the short-term plan »
Monday
Jun162008

Randgold Resources Limited: Buy!

Randgold Chart 17 June 2008

Today we acquired the stock of gold producer Randgold Resources Limited for an average price of $37.65 per share, having stated our intention to acquire this stock on
June 3rd, 2008, in an article entitled, Randgold Resources Limited: Prepare to Buy!

On June 3rd, 2008 we wrote the following:

“We have watched this stock for some time hoping to identify a suitable entry point but for various reasons we have not made a purchase. However, we could see two factors conspire to present us with a bargain buying opportunity; firstly the summer doldrums are now upon us and secondly Randgold’s share price is deteriorating.”

As we can see from the chart the stock has continued to deteriorate and broken below its 200dma and now sits some $18.00 below its peak of about $55.00. This stock may decline some more as the summer season would appear to have rendered gold directionless. However we believe that the downside for Randgold is limited, as the majority of the damage has been done. This is our first purchase of this stock and should it continue to fall we may well become buyers again, a lot will depend on the performance of other gold producers and whether they represent better value or not. We must also keep one eye on the possible re-emergence of the credit crunch, adjustments to interest rates and the progress of the US dollar, not to mention the price of oil and the political situation in the Middle East.

Randgold Resources Limited trades on the London Stock Exchange under the symbol of RRS and on the NASDAQ under the symbol of GOLD.

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Reader Comments (4)

Hi Guys!
I bought it last week at 37.54 after a negative anouncement about US inflation which made me jump very early. I bought KGC at 18.40 also. However, to my surprise, there was no gold rush at all. Even KGC fell a little more, but randolf had an on-balance volume signal which appeared like a hard floor. The same I can tell for Petaquilla (PTQMF), an advanced Panama based junior, which looks interesting and bought yesterday.
Well, my congrats and gook luck

June 17, 2008 | Unregistered Commentertoni

I'm wondering why there is almost no coverage on Nova Gold. To me this is the most exciting stock out there. 31 mill quality oz.of gold, and another 4 mill inferred at Donlin in Alaska in a stable country, and here we are chasing a million or two high risk oz. any where in the world. Add the copper, gold, silver at Galore Creek in Canada as well as 4 other mines and you have a bonanza. What am I missing? It's down the road a bit but it is proven.

Del

June 17, 2008 | Unregistered CommenterDel Funk

Del,

There a lots of stocks that we have not covered but we invite you to submit a write up to us and we will publish it on your behalf.

Now, if we look at the first three months of this year when gold took off on a dramatic run, NovaGold did nothing in the same period. It bothers us when a stock does not react to the underlying commodity, but maybe you could enlighten us?

June 17, 2008 | Unregistered CommenterGold Prices

Randgold closes above $40.00 giving us a nice start to this trade.

June 23, 2008 | Unregistered CommenterGold Prices

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