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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 17 4:00 PM EST

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To: pater tenebrarum who wrote (49133)	5/3/2000 10:33:00 AM
From: Grandk	Read Replies (1) of 99985

Lehman playing games to get shares on the cheap? Gold Stocks Cut to `Underperform' at Lehman New York, May 3 (Bloomberg) -- Lehman Brothers Inc. analyst Peter Ward downgraded his ratings on Newmont Mining Corp., Battle Mountain Gold Co., Homestake Mining Co. and Kinross Gold Corp. to ``underperform'' from ``neutral'' because he said expectations for bullion prices were too high. ``We are lowering our long term gold price forecast to $270 an ounce,'' Ward wrote in a note to clients. ``Street forecasts of $325 an ounce are too optimistic.'' Gold for June delivery traded at $278.20 an ounce today on the New York Mercantile Exchange. Ward said he sees Newmont trading at 18 in 12 months, Battle Mountain at 1 1/2, Homestake at 5, and Kinross at 1. Ward noted that despite a rally yesterday, ``gold stocks have significantly underperformed the market'' this year. The Amex Gold Bugs Index's 9.59 percent gain yesterday was its biggest rise since Feb. 4. The index has fallen 11.4 percent for the year. Ward said an agreement among 15 European central banks that was initially expected to boost gold prices, ``has merely institutionalized the commoditization of gold.'' The agreement, announced Sept. 26, limited the banks to previously announced sales of their gold reserves for five years. Ward also said a report released April 26 by Gold Fields Mineral Services Ltd. ``was decidedly bearish.'' The report said overall investor demand plunged 46 percent in 1999 as German investors sold more gold than they bought for the first time since 1993.

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