Terry W. Land and timber barron -g- best of luck with the auction tomorrow. The Move in Gold today was quite
impressive.
Brief.com upgraded their precious metals sector today:
Comment: Gold has enjoyed a nice rally as of late, with the June contract rallying almost $20 in just over the last month and a half. Gold has been buoyed by inflation concerns on the back of aggressive central bank easing, a tightening of lease rates and concerns that a troubled Australian producer may have to unwind its hedge book. The rally in gold got started in early April when the June contract bounced off of significant former support just under the $255 level, today it breached key resistance levels on it's way to $285/oz. The large short positions that we told you about in our last review have been covering, and we're hearing rumblings that the Bank of England might reduce or eliminate its gold sales. Needless to say, it has sparked a rally in the gold stocks. In our most recent review of the sector, we speculated that the rise in gold stocks was a precursor to a rise in gold prices. There was a confluence of unexpected factors that lead to the spike in gold prices, but nevertheless, the equity markets did presage a rise in gold prices. The Fed's aggressive rate cuts have sparked inflation concerns, and while we have some serious doubts about the validity of those concerns, there is no question that many are worried. Gold is still a net sell, rather than a net buy with the central banks, but the technical backdrop surrounding June gold looks pretty good right now. As long as gold stays above the $265 level, the gold stocks should hold up relatively well. In addition, industry consolidation will continue to support the sector. We are therefore taking our sector rating to Market Perform, or three stars.
Stocks: AngloGold (AU), Barrick Gold (ABX), Battle Mountain Gold (BMG), Coeur d'Alene Mines (CDE), Echo Bay Mines (ECO), Hecla Mining Co. (HL), Homestake Mining (HM), Kinross Gold (KGC), Newmont Mining (NEM), Placer Dome (PDG). |
