A month ago, Oceana shares were trading at 87c. They have since gained more than 47% in value to trade up to $1.25, but weakened slightly to trade just below $1.20 yesterday.
Global spot gold prices during that past month ranged from $US890 ($NZ1521) per ounce to a high of $US916 ($NZ1565), ABN Amro Craigs broker Peter McIntyre said.
Oceana's positive first-quarter report last week, with increased operating profit, the US Dow Jones market gaining 23% over six weeks and a further lowering of interest rates had all combined to make investors less risk-averse and consider gold stocks - historically considered more high risk than most equities.
"It [Oceana price gain] is surprising because when equity markets rally gold is usually sold off," Mr McIntyre said.
However, he said institutional and general investors believed the US dollar would be weak for two to three years, boosting inflation. With gold bullion resuming its place as a hedge against inflation, the stocks of gold producers were becoming more attractive, Mr McIntyre said.
Oceana is the country's largest gold producer, having delivered more than $2.5 million ounces during the past 19 years. It is on track to produce a record 280,000oz-300,000oz from its East Otago and Reefton mine on the West Coast this year.
However, while having last week reported a record quarter of production and turned a $US11 million ($NZ19.4 million) last year into a $US9 million profit, it has had consecutive annual losses of $US54.7 million and $US69 million.
Triple-listed on the Toronto (TSX), Australia and New Zealand bourses, since its June 2007 principle relisting on the mining friendly TSX, at $A4.15 per share, Oceana's shares have repeatedly spiked and slumped.
Mr McIntyre said recent ABN research had shown a preferance for shares in gold and uranium producers, with BHP Billiton the top stock to hold because of its diversification.
The recent reporting season in the Australian resource sector included observations that declining costs were not yet flowing through balance sheets, the outlook remained uncertain long term and China alone could not solve the the resource sector's problems.
"Only the gold and uranium miners are likely to see near-term margins expand," Mr McIntyre said.
In other ABN separate research, researchers compared several "exchange traded funds" for investors wanting exposure to the gold sector by tracking the price of spot gold, ranging from recommended through to "not for the faint of heart" and not recommended.
Two funds, iShares COMEX Golf Trust and SPDR Gold Shares, with respective market capitalisations of $US1.9 billion and $US32.2 billion, both hold gold bullion meaning they can closely track the performance of spot gold prices. However, fund costs are periodically met by selling bullion which affects its share price.
Mr McIntyre said for investors looking for an earning stream and dividend flow, Market Vectors Gold Miners, with a $US103 million market capitalisation, was recommended as it invested in about 33 gold companies around the world, as opposed to tracking gold spot prices.
On the riskier basis, the six-month-old ProShares Ultra Gold ETF, with a market capitalisation of $US131 million, uses swap, future and options contracts and cash, but those instruments and use of debt meant the fund was not recommended or for the "faint of heart".
"We would expect losses to be significant in the event that the price of gold begins to trend down," Mr McIntyre said.
