Going to do some DD on MNT this weekend.I can see some big plusses with the monthly option to directly convert to physical gold bullion.May also be a great way to transfer wealth out of certain countries.Would suspect it would trade at a premium at times and discounted in times of falling gold prices.
I see Dundee likes CSI....
Can gold continue to be a safe haven? John Shmuel Nov 25, 2011 – 2:41 PM ET | Last Updated: Nov 25, 2011 7:30 PM ET
A man uses a magnifying glass to inspect a bar of gold in Bangkok, Thailand.
Sukree Sukplang/Reuters
November has been an odd month for gold.
For starters, a strong positive correlation has emerged between gold prices and 10-year Treasury yields. Unlike the chaos of August, gold prices this month have moved down as Treasury yields dip (implying a disconnect with the traditional view that gold is a safe haven from volatility).
But analysts at Dundee Capital Markets aren’t phased by this new development. In a report titled Bridge Over Troubled Water, analysts at Dundee lay out their arguments on why they think gold will retain its safe haven allure among investors.
The analysts point to gold’s performance over the past four months (a period between Dundee’s last gold update and its current one released Friday). While the S&P/TSX Composite and all its sectors posted negative returns during this period, gold as a commodity posted a 5% gain. Even gold stocks, known for their volatility this year, displayed defensive characteristics. Gold companies on the TSX posted an average return of 4% during the period.
The Dundee analysts, of course, point to all the familiar reasons why they expect gold to remain a safe haven (the eurozone debt crisis, the failure of the American ‘supercommittee’ on debt).
“Global equity markets remain fraught with risk as we continue to wade through uncharted waters,” Dundee analysts said in a note. “While we can’t promise gold will be your perpetual bridge over these troubled waters, we expect bullion will likely retain its role as a safe haven in the near-term.”
It’s interesting to note the “we can’t promise part.” Seems like the uncertainty in global markets is starting to really seep into analyst notes recently.
Either way, Dundee sticks by its guns and recommends gold and gold equities as an overweight for portfolios.
“With market risks elevated at the present time, we would advise cautious investors to remain in reputable names including the likes of Barrick and Yamana, that boast defensive balance sheets, reliable production and robust production growth profiles,” the analysts said.
Dundee also has some junior miners it likes, but adds the caveat that large producers will protect investors better when it comes to downside risks. Regardless, here’s what they say about juniors:
“With respect to junior producers, we continue to like names such as Aurizon Mining and Perseus Mining.”
Finally, if you can stomach a lot of risk with possible high reward, there are the developers and explorers. Here’s what Dundee likes:
“Our favoured names include Torex, Continental Gold, Lydian and Sabina, and for the more risk-tolerant investor, we also like Colossus Minerals.”
• Email: jshmuel@nationalpost.com | Twitter: jshmuel
Posted in: Trading Desk Tags: Aurizon Mining, Barrick, bonds, Bullion, Colossus Minerals, Continental Gold, eurozone, gold, Greece, Italy, Lydian, Outlook, Perseus Mining, prices, recession, Sabina, safe haven, Spain, Target, Torex, volatility, Yamana, yield
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