With more than 20 years of experience in the precious metals industry, Peter has his finger on the pulse of the gold market. He's seen the effect that a tumultuous 2013 – when gold prices dropped 28% – has had on many gold mining stocks.
"The past couple of years have seen considerable pressure on most gold equities, thanks in large part to a declining then consolidating gold price," Krauth said. "That became a major challenge to gold miners as they've tried to grow production despite falling gold grades."
While many gold mining stocks faltered in the past two years, top companies were able to separate themselves.
"The best mining companies met these challenges by controlling and lowering costs, focusing on the most viable projects, reining in capital expenditures, and even divesting suboptimal assets," Krauth said.
Those companies that managed to strengthen operations during the down gold market are now poised to capitalize on gold prices' rise.
"Gold stocks are attractive now for several reasons," Krauth said. "On a historical basis and relative to the gold price, gold stocks are still oversold, representing a strong bargain. What's more, the World Gold Council has reported record jewelry, bar, and coin demand for 2013, with consumer demand up 21%."
Physical gold deliveries reached record levels in January at 246 tons for the Shanghai Gold Exchange, even topping worldwide mine production in the same month. Meanwhile, dividend payouts from some the largest gold miners have increased significantly in the last three years, despite the weakened gold price.
As gold prices rise, here are two gold mining stocks that Krauth expects to benefit…