Are Gold Miners A Buy At These Levels?

Are Gold Miners A Buy At These Levels?

With the price of gold at relatively depressed levels, could now be the time to buy the miners?

After reporting earnings, three primary gold miners, for the most part, did not surprise market watchers. Yet it was the price assumptions for gold that might be worth noting.  Gold miners wrote down reserve estimates and took some degree of write-down in the 4th quarter of 2013, a report from Citi noted. Going into year-end reporting, Barrick Gold Corp. (TSE:ABX) (NYSE:ABX) had the most aggressive price assumption built into their model, at $1,500 per ounce.  But coming out of 2013, their gold pricing model was at $1,100 per ounce. Kinross Gold Corporation (NYSE:KGC) (TSE:K) had a $1,200 price target and Goldcorp Inc. (NYSE:GG) (TSE:G) had the highest price assumption at $1,300 per ounce.

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Is gold bottoming out?

What is exciting to investors is the notion that the price of gold may have recently completed a double bottom and, having breached the $1,300 level might resume its long term bull trend (see chart above, Source: Stock Charts).  If gold were to resume its bull trend, it would be particularly bullish for the miners, whose estimated cost of production ranges from the high of $1,000 per ounce at Kinross to a low of $950 per ounce at Barrick.  All three miners cut their reserve estimates as well:  Barrick Gold Corp. (TSE:ABX) (NYSE:ABX) cut estimates by 19%, Kinross Gold Corporation (NYSE:KGC) (TSE:K) by 16% and Goldcorp Inc. (NYSE: