| The recent strengthening of the gold price along with a weaker rand in the last quarter of 2014 has prompted many investors to consider switching from owning physical gold (Like the ABSA NewGold ETF) to owning the shares of gold mining companies.
The attraction of owning shares is obvious when the operating margin of gold companies is increasing. This can happen when things outside (rand/dollar exchange rate, gold price) or inside the mines’ control results in income rising faster than costs. This widening of the operating margin creates free cash flow, which in turn underpins a rising share price and results in a holding income for investors (dividends)...............................................Full Article: Source
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