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The Sochi 2014 Winter Olympics weren’t the only place where Canada has made a good showing with an emphasis on gold. The S&P/TSX Composite Stock Index has gained 4.6% thus far this year at the time of writing, one of the better returns among the major industrialized markets. Moreover, like the Olympics, gold has been driving the gains, with the TSX Gold sub-index gaining over 30% so far this year, a sharp reversal from its woeful performance in 2013. While gold bullion is also rising, its year-to-date gain of slightly over 10% pales in comparison to the performance of the gold stocks. Clearly some of this is just a recovery from the extremely low valuations reached last year as investors liquidated their holdings in the gold ETF. But the gold companies have also shown a greater focus on cost reduction and cash management than growth in production. Gold prices also found support at the critical US$1180 level, which was the breakeven point for many of the higher cost producers. (more…)