It has always been fascinating to me how pundits promote their view-point..and that is in the business where one is considered a genius when he/she is 51% correct in a given year..
as an old saying goes "only two people know for sure. Both live in Switzerland and both hold an opposite opinion.."
Headline: Gold stocks find some luster as bullion rebounds
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NEW YORK, March 27 (Reuters) - Gold stocks still gleamed a
little on Friday as bullion stayed above the key $300-per-ounce
level amid some rekindling of inflation worries.
But much of the buying opportunity may have already passed
for now, and any strength should be seized upon as a selling
opportunity, analysts said.
Gold bullion was trading at $303.60/$304.10 per ounce
Friday, up from $293.00/$293.50 at the start of the week.
Among the most active precious metal stocks on Friday,
Barrick Gold (NYSE:ABX) gained 1/2 to 21-13/16 around midday in
trading on the New York Stock Exchange. Newmont Mining (NYSE:NEM)
also was up 1/2 at 31-1/16 in NYSE trading.
Meridian Gold (NYSE:MDG) gained 7/16 to 3-7/8, while Kinross
Gold (NYSE:KGC) rose 1/8 to 4-5/16, and Battle Mountain (NYSE:BMB)
added 3/16 to 6-5/16 in NYSE trade.
On the American Stock Exchange Friday, Bema Gold (AMEX:BGO)
rose 1/8 to 2-1/2 at midday. Cambior Inc. (AMEX:CBJ) was up 5/16
at 6-13/16. Echo Bay Mines (AMEX:ECO) rose 1/8 to 2-3/8.
Brokerage Credit Suisse First Boston initiated coverage on
shares in Newmont Mining (NYSE:NEM) and Newmont Gold (NYSE:NGC) on
Friday, and rated them a buy.
"My focus was on the valuation of Newmont relative to the
sector," said CSFB's gold analyst Robert Doyle "Even if the
price of gold does not move, Newmont is attractively valued
relative to its peers."
Doyle also was optimistic about the metal's outlook as
well.
In contrast, Cantor Fitzgerald's chief market strategist
Bill Meehan said, however, that gold stocks were already less
attractive than earlier in the week, and were only short-term
trading opportunities amid market swings.
"They are not for the meek and mild," Meehan said.
This week, several factors have combined to propel the
price of gold higher, with a corresponding effect on stocks,
although not all the influences were directly related to the
yellow metal.
On Thursday, the Philadelphia Stock Exchange's index of
gold and silver stocks soared by almost 8 percent.
By late Friday morning, the PHLX gold and silver index was
up another 2 percent. "Inflation jitters have hit the
market," Meehan said.
Gold is traditionally seen as a safe haven in time of
rising consumer prices, but inflation is at historical lows in
the United States.
"Why hold gold stocks? There is no inflation," said Phil
Orlando, chief investment officer at Value Line's Asset
Management Division.
"If I were a gold investor and I saw the strength in that
sector, I would use that strength to sell into strength,"
Orlando said.
A slight rebound in crude oil prices earlier in the week
fueled the inflation worries, Meehan said.
Recent reports that Wall Street guru Warren Buffett had
bought a huge amount of silver, and his fellow billionaire
George Soros had a stake in a silver mine, also bolstered
sentiment in the precious metals complex, Meehan said.
And last weekend, Bank of Italy Governor Antonio Fazio said
that gold's share in the reserves of the planned European
Central Bank could be about one-third of its total reserves.
"That's pretty positive for gold," said Jim Steel, a
commodity analyst at Refco.
On Friday, the good news for gold continued when Belgium's
central bank signaled its intent to stop a massive program of
gold coin sales, which gave a further boost to the market.
Bullion has reeled in recent months as central banks sold
gold reserves and switched to currency or other assets. This
dented gold's image as the ultimate safe haven.
Steel said there was a feeling the worst may be over for
gold after slumping in recent months, and strong silver and
platinum group prices also were underpinning gold.
Spot market palladium was trading at an 18-year high of
$295 per ounce in London overnight.
Copyright 1998, Reuters News Service |
