Tickers in this Article: GLD, AU, GG, KGC, KGN, ABX
Despite the value investor's aversion to owning gold, 2010 will likely turn out to be a great year for the shiny yellow metal. The SPDR Gold Trust (NYSE:GLD), the most popular ETF for owning gold, will likely finish 2010 up nearly 30%, easily outperforming the S&P 500 Index. GLD is an ETF that owns physical gold bullion, so its return is directly related to the price movement in gold.

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A Better Year For Gold Than Gold Stocks
What is good for gold is usually even better for the companies that mine and sell the metal. Barrick Gold (NYSE:ABX), the multi-billion-dollar giant gold mining company, is heading toward year end up nearly 40% for the year. As the price of gold increases, the profits of these miners increases at a higher rate due to the leverage effect of fixed costs. Goldcorp (NYSE:GG), the other gold mining giant, has underperformed the price of gold bullion in 2010 as shares are up nearly 20% going into the final days of 2010. Many of the gold miners started the year with a bulk of their production hedged at prices that now are well below the market price. As these companies worked to unwind those hedges, they had to take a charge to earnings. South Africa-based AngloGold Ashanti (NYSE:AU) was one such company, and as a result its shares were up 24% going into 2011, slightly below the appreciation in the gold price. (For more, see 5 Gold Stock Plays.)

A Year Of Hits And Misses
The strong performance of gold in 2010 was no guarantee of profits for gold miners. Shares in Kinross Gold (NYSE:KGC), for example, are up a meager 2% heading into the final weeks of the 2010 year. Small cap gold stocks saw some increased speculation during the year. Keegan Resources (AMEX:KGN) is up nearly 50% in 2010. The company has a market cap of $400 million and has yet to report any revenues. Many gold miners are merely still in the exploration stage, so the mere increase in the price of gold attracts the attention of speculators who are hoping to "strike gold" with a new discovery.

Looking Ahead
Despite a lack of cash flow, gold has a strong psychological hold on mankind the world over. Concerns over global monetary policy will not disappear in 2011. As such, the New Year may yet prove to be another golden year. (For more, see A Gold Bug's ETF Play.)

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