In August, the Federal Reserve raised interest rates and gold prices plunged to their lowest level in four months. The central bank is unlikely to raise interest rates any time soon. While the greenback has remained stable, higher investment demand drives gold prices up. We believe that fundamentally sound gold mining stocks Centerra, Torex, and Jaguar (JAGGF), could prove to be good investments now. Gold is widely used as a hedge against currency fluctuations because of its limited use in the industry. It is because of this that yellow metal prices are vulnerable to changes in monetary policies.

The Fed had signaled that a possible rise in interest rate increases was imminent, and gold prices dropped to $1.677.90/ounce in August after they fell four months ago. The prices quickly rebounded to $1,828.74/ounce this week, the highest since September. The rebound can be attributed to the central bank’s intention to not raise the benchmark interest rates anytime soon. Furthermore, analysts expect gold prices to be buoyed by a decline in U.S. Treasury yields after this week’s Producer Price Index showed that wholesale inflation is decelerating.

We believe that the fundamentally sound gold mining stocks Centerra Gold Inc., Torex Gold Resources Inc. (OTC), and Jaguar Mining Inc. could all be good investments now.

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