Why All That Glitters Is (Yamana) Gold And I'm A Buyer

Gold and silver have pulled back from their recent highs hit on Oct. 4 this year, after spiking significantly following global central bank actions in August and September. The most popular gold and silver ETFs, the SPDR Gold Trust (GLD) and the iShares Silver Trust (SLV), are down 2.5% and 3.1%, respectively, in the last week alone. In contrast, the ETFs that track the miners of these metals -- such as the Market Vectors Gold Miners ETF (GDX), the Market Vectors Junior Gold Miners ETF (GDXJ), and the Global X Silver Miners ETF (SIL) -- are down slightly less in the last week at 1.7%, 2.9%, and 1.1%, respectively, but are down well over 10% each from the highs. When gold stocks hit lows at the end of July, I recommended them as buys. I reiterated these buys throughout the month of August, highlighting many companies along the way. As all of these ETFs and most gold stocks are off their highs, I believe now is a good time to consider establishing positions once again. I think they are still good buys at current levels for the long-term investor, as I see precious metal prices continuing to rise over time. Individual stocks, however, can offer substantially better returns relative to the ETFs if done carefully. A good combination to look for in a stock is one in which the underlying company offers growth, as well as a decent dividend. In this article, I highlight Yamana Gold (AUY) and its