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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (12473)	1/3/2008 10:54:36 PM
From: LoneClone	Respond to of 194678

Gold Miners Soar to Records as Bullion Prices Continue Rise By David Friend 03 Jan 2008 at 01:40 PM GMT-05:00 resourceinvestor.com TORONTO (CP) -- Gold stocks showed relentless strength at the Toronto Stock Exchange on Thursday as some of the country's biggest producers hit new highs prompted by soaring bullion prices. Canada's Barrick Gold Corp. [TSX:ABX; NYSE:ABX], Agnico-Eagle Mines Ltd. [TSX:AEM; NYSE:AEM] and Kinross Gold Corp. [TSX:K; NYSE:KGC] were a few of the key companies that touched records during the trading day. On Thursday, the February bullion contract in New York closed ahead C$9.10 to US$869.10 an ounce, near the US$875 record for gold futures set in late January 1980. Meanwhile, spot prices left a nearly 28-year record in the dust. The speedy increase helped send Barrick shares to an all-time intraday record of C$48.75 on TSX before giving up some of its gains. It closed at C$48.43, up C$2.78. Kinross shares settled at a historical high of C$20.68, up 68 cents. Goldcorp Inc. [TSX:G; NYSE:GG] set a 52-week high of C$38.17 in day trading before the Vancouver-based gold company closed up C$1.32 to C$37.65. NovaGold Resources [TSX:NG; AMEX:NG] shares led the sector in growth on the Toronto market, ahead 16% or C$1.44, to C$10.33. Its stock received extra confidence from reports that a U.S. appeal court upheld a decision by the U.S. Army Corps of Engineers granting a permit for a NovaGold subsidiary to develop a project in Alaska. Overall, the TSX gold sector was up 3.5%. The precious metal showed no signs of losing steam a day after smashing a nearly 28-year spot price record of US$850 an ounce. On Thursday the spot price continued its ascent, up US$9.40 to US$866.40. Rising prices should continue to bulk up stocks in the TSX sector, suggested Maison Placements analyst John Ing. While bullion has been on the rise since last year, company stocks never had the chance to play catch up. The past two sessions have helped them gain some ground. ''Part of the reasons for the lack of performance was investors felt gold companies had a rising cost structure. Now with the expectations of a rising gold price this will offset'' the increase, he said. ''My expectation is that we should get US$1,000 gold prices this year so these companies will do quite well.'' Gold prices tend to react adversely to the U.S. dollar in that they will climb in value when the greenback slides. ''What's working in (gold's) favour is the fundamental backdrop which sees oil climbing . . . an inflationary threat and slowing growth in the U.S. economy,'' said Scotia Capital currency strategist Camilla Sutton. ''All indicators at this point tell us . . . we should continue to see near-term strength in gold.'' The value of the commodity is reflecting against more than just the U.S. dollar, said Gavin Graham, chief investment officer at the Guardian Group of Funds. ''In the last year and a half it's broken out against the euro, sterling, Swiss franc, yen. It's not merely going up against the U.S. dollar . . . it's going up against all printed currencies,'' he said. Graham said gold is actually worth only about a third of its current value after inflation is taken into account. ''It's not like in real terms its exactly been a barn burner,'' he said. ''But obviously, as in the late '70s, it reflects concerns about the printed paper currency and the ability to retain its value in real terms.'' As individual stocks continue their expected uptick, investors will have the opportunity to nab appealing opportunities, according to analysts. Emerging producer Agnico-Eagle Mines Ltd. could be a key catch in the sector, said Shane Jones, managing director of Canadian Equities at Scotia Cassels Investment Management in a recent interview. The company has a ''great production pipeline that is really going to shine,'' he said. Its shares touched a historical record of C$58.87 before ending the day at C$58.01, up C$1.90. Junior companies will also offer ''a real bang for your buck,'' according to Ing. ''They are producers but they have a lot of projects that with a rising gold price will become extremely profitable.'' Eldorado Gold Corp. [TSX:ELD; AMEX:EGO] was one of the smaller standouts, he suggested. The company dropped seven cents to C$6.18 on Thursday. Another prospective sector grab was High River Gold Mines Ltd. [TSX:HRG] which was down nine cents to C$2.96. The staggering increase in gold prices over the past two days could also be a harbinger for inflationary pressure. ''Not only is there concern about security of capital or hedge against the U.S. dollar, but if history is any indication it's telling you that inflation is going to be a big problem,'' Ing said. ''My expectation is that when gold and oil starts moving you've got to be looking at inflation. That's sort of the canary in the coal mine.''