Time to Rush Back to Gold?

Now is the time to get back into gold equities, Agnico-Eagle Mines CEO Sean Boyd told Cramer Tuesday.

Gold’s decline to $819 and change from a high of $980 is no different from the pullback that bullion saw back in May 2006, Boyd said. At that point, gold was at $725, a 26-year high at the time, and it declined 20% twice over the span of three or four months. Now we’re seeing another decline near that level, and it’s happening right before gold’s traditional strong season of September and October.

“The gold equities are on sale here,” Boyd said.

Cramer agreed, but he wondered whether or not high production costs at Agnico-Eagle would keep an investor from fully benefiting from a gold rally.

Boyd put the blame for any weakness in his company’s most recent quarter on the “significant decline” in realized zinc prices. They were cut in half year-over-year.

“So I think you buy a gold stock,” Boyd said.

Unlike an exchange-traded fund that follows the commodity’s price, buying into a company offers investors growth through increased production and reserves without diluting the stock.

“We are doing all of that,” Boyd said.

As for finding costs, AEM spends $250 to extract an ounce of gold. So “we’re well below the current price,” Boyd said.

“This is the best gold company,” Cramer said.

Investors who think it’s time to get back into gold – as Cramer does – might want to take a serious look at AEM.

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