News from the Dow Jones News Wires.........
=Gold Stks -2: Analysts Skeptical Of Gold's Haven Status
NEW YORK (Dow Jones)--Shares of gold-mining companies traded higher Thursday, along with gold prices, in what two observers said may be the market's response to U.S. threats of military action against Iraq.
Peter Ward, a gold analyst at Lehman Brothers Inc., and Michael Martin, a gold analyst and trader at R.F. Lafferty & Co., said the gold sector's strength Thursday may be linked to the tensions with Iraq. The threat of an armed conflict of some sort with Iraq may have moved some investors seeking a haven toward gold, which has played this role in the past.
But both Ward and Martin were skeptical of the merits of this strategy, noting that gold prices haven't moved up dramatically. Recently, the December Comex gold-futures contract was up $3.40 at $297.10 a troy ounce, while the February contract was up $3.40 at $299.30.
"Ten years ago, a looming conflict in the Middle East would result in a $30 or $40 move in gold prices," Ward said, "and today it's worth just $3." The yellow metal, he added, "doesn't have the same status as a safe haven investment that it once did."
If the reason gold prices and gold stocks climbed higher Thursday is the Iraq situation, then "I'm not as sanguine about the movement," said Martin. "But on the other hand," he continued, "gold is ready to go higher, and this may be the catalyst that helps it get through."
Among Thursday's advancers so far: Newmont Mining Corp. (NEM) was up 1 9/16, or 7.1%, at 23 5/8; Barrick Gold Corp. (ABX) rose 1 1/4, or 6.0%, to 22; Homestake Mining Co. (HM) climbed 5/8, or 5.3%, to 12 7/16; Cambior Inc. (CBJ) was up 1/4, or 4.6%, at 5 11/16; Echo Bay Mines Ltd. (ECO) rose 1/8, or 5.4%, to 2 7/16; Prime Resources Group Inc. (PRU) moved up 5/16, or 3.6%, to 8 15/16; Placer Dome Inc. (PDG) advanced 1 3/16, or 7.6%, to 16 7/8; Kinross Gold Corp. (KGC) rose 1/8, or 4.4%, to 2 15/16; and TVX Gold Inc. (TVX) rose 3/16, or 9.7%, to 2 1/8.
- Gaston F. Ceron; 201-938-5166
gaston.ceron@cor.dowjones.com
(END) DOW JONES NEWS 11-12-98
01:34 PM
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