Mining firms offer golden returns

Gold bulls, flush from a ninth year of gains in the metal, should pour their winnings into mining companies as the shares benefit from falling costs, according to analysts at JPMorgan Chase & Co and Fairfax IS.

The above chart shows the FTSE Gold Mining Index, including Barrick Gold Corp, Newmont Mining Corp, AngloGold Ashanti Ltd and Gold Fields Ltd, has underperformed spot gold for about a year.

Surging costs for fuel, labor and steel last year, and declines in global stock markets have pushed the mining index to near a record low relative to the gold price.