Jim Cramer: Take Profits In Gold As Buffett Provides Food For Thought
(Kitco News) - With gold stuck in a rut, now might be the time to take some money off the table on profitable positions in mining companies, according to CNBC and TheStreet.com’s Jim Cramer.
“I just don’t see gold going anywhere right now,’ he said. “As much as I like gold, if you have a profit in some gold, there is nothing wrong with taking it.”
Cramer’s comments come as Kirkland Lake has rallied almost 18% since the start of the year, closing Monday’s session at $18.94 a share. At the same time, gold prices are relatively unchanged since the start of the year as the market hovers near the bottom end if its well-established trading range; June gold futures last traded at $1,307 an ounce, down 0.54% on the day.
Mining analysts have been fairly bullish on the mid-tier mining company with an average price target of around $21.35 a share. The company last week reported a higher first-quarter profit and gold output than a year ago, plus upped its dividend to 3 Canadian cents from 2 cents.
Cramer also said that he is reconsidering his opinion on gold after thinking about Warren Buffet’s comments on the yellow metal made over the weekend.
On Saturday, during the Berkshire Hathaway's annual meeting, Buffett compared investing in gold to stocks in 1942. He noted that a $10,000 investment in the S&P 500 Index (even though the index didn’t exist back then) would be worth $51 million today. At the same time gold’s value would be about $400,000.
"For every dollar you could have made in American business, you'd have less than a penny of gain by buying into a store of value which people tell you to run to every time you get scared by the headlines," he said.
“While the businesses were reinvesting in more plants and new inventions came along, you would ... look into your safety deposit box, and you've have your 300 ounces of gold. And you would look at it, and you could fondle it, I mean, whatever you wanted to do with it. But it didn't produce anything,” he added.