Gold stocks mixed as metal hits $327
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 10:55 AM ET May 29, 2002
NEW YORK (CBS.MW) - Gold stocks traded on a mixed note early Wednesday as three downgrades hit the sector. Gold futures reached $327 as the broader market tumbled and the dollar weakened.
The Philadelphia Gold & Silver Index ($XAU: news, chart, profile) was down 1 percent and the CBOE Gold Index ($GOX: news, chart, profile) was about flat. The Amex Gold Bugs Index (HUI: news, chart, profile), meanwhile, tacked on 1.7 percent in early trade.
Barrick Gold (ABX: news, chart, profile) and AngloGold (AU: news, chart, profile) were downgraded by Goldman Sachs due to valuation concerns and the belief that gold will be "more challenged to rise" from current levels due to weakness in jewelry demand. Analyst Dan McConvey also downgraded Australia's Newcrest Mining.
Shares of Barrick Gold fell by 1.6 percent to $22.84 and AngloGold slid by 7 cents to $34.22. Earlier in the session, AngloGold reached a 52-week high of $34.58.
But Charles Nedoss, an analyst at PeakTradingGroup.com, sees more upside for gold as U.S. equity markets remain weak.
"The continued slide of the U.S. dollar versus the euro has also helped the shiny mineral. Also, a low interest rate environment has helped buoy prices," he said. "Last Friday, the commitment of traders report showed that commodity funds continued to add to their long positions and the small speculators who tried to pick a top exited the market licking their wounds."
"Technically, the June contract has taken out weekly highs going back to last March. On a weekly basis, this market needs to close above $321.50 to keep the bullish forces in the driver's seat," he said.
June gold traded up $2.60 to $326.70 an ounce, after hitting $327.30 earlier in the session. Gold futures have been hitting levels not seen in more than two years. Comex gold inventories stood at $1.56 million ounces as of late Tuesday, unchanged.
In currencies, the dollar was off 0.2 percent vs. the yen while the euro gained 0.4 percent against the greenback.
Meanwhile, the broader market struggled in morning trading. The Dow Jones Industrial Average ($INDU: news, chart, profile) slid 0.2 percent to 9,962.48 while the Nasdaq Composite Index ($COMPQ: news, chart, profile) gave up 0.7 percent to 1,639.86. The S&P 500 ($SPX: news, chart, profile) was about flat. Treasurys rose moderately. See Market Snapshot.
Among gold shares, Agnico-Eagle Mines (AEM: news, chart, profile) was down almost 1 percent to $17.41, while Freeport McMoran Copper & Gold (FCX: news, chart, profile) was down 2 percent to $20.40.
Newmont Mining (NEM: news, chart, profile) gave up 10 cents to $31.90. Placer Dome (PDG: news, chart, profile), which made a bid on Sunday to acquire AurionGold, was up 8 cents to $14.32.
Goldcorp (GG: news, chart, profile) rose by 3 percent to $11.93. Meridian Gold (MDG: news, chart, profile) tacked on 6 cents to $19.23.
Harmony Gold (HGMCY: news, chart, profile) slid 16 cents to $18.71. ASA Limited (ASA: news, chart, profile) gave up 10 cents to $38.50. Gold Fields (GFI: news, chart, profile) declined by a nickel to $16.05.
In other metals: July silver was up 6.8 cents to $4.95 an ounce. Comex silver inventories stood at 72 million ounces, unchanged.
July copper was up 0.1 cent to 75.80 cents a pound. Comex copper stocks stood at 334,586 short tons, up 643.
July platinum slid 40 cents to $544.60. June palladium gave up $2.30 to 353.50.
Deborah Adamson is a reporter for CBS.MarketWatch.com in Los Angeles.
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