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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (17632)	9/5/1998 3:40:00 PM
From: Eashoa' M'sheekha	Read Replies (1) \| Respond to of 116764

As US$ drops, gold stocks continue their rally By PAUL BAGNELL Mining Reporter The Financial Post ÿStocks of gold producers surged again Friday, fuelled by a fifth-consecutive daily increase in the price of gold and hopes that bullion prices are finally headed for a rally. ÿThe Toronto Stock Exchange's gold and precious minerals subindex jumped by 9.46%, up 468.97 points to 5428.95. It was the fourth daily gain in a row for the subindex, which climbed 28.4% from Monday's close through Friday. ÿThe price of gold in New York was up US$1.80 Friday, to US$287 an ounce. Gold hit a 19-year low of US$274.60 on Aug. 28. ÿAnalysts said gold's recent upswing has been sparked by a round of short-sale covering and by the recent decline in the US$. ÿ"The long-awaited reversal of the US$ has happened," said John Ing, president of Maison Placements Inc. in Toronto. ÿThe US$ has fallen 7% against the Japanese yen since Aug. 26, to its lowest level since mid-May. Against the German mark, the US$ closed Friday at its lowest level since mid-November, 1997. ÿ"Hints of lower interest rates in the States, together with the US$300-billion-plus trade deficit, suggest a restoration of gold's traditional role as hedge," Ing said. ÿ"In this market we are in, gold has regained its role as a currency," said Victor Flores, a Texas-based gold analyst for HSBC Securities Inc. ÿFlores also said Russia's refusal to sell gold to shore up its currency caused a round of short-sale covering this week. Speculators, he said, had sold gold short, betting Russia would sell bullion. HSBC is calling for a 1999 average gold price of US$325. ÿHe cautioned against reading too much into this week's surge. "Gold is still below US$300, and this industry is still in a bind." ÿInvestors have pounced on gold companies' shares this week, the analysts said, because the stocks have long been seen as undervalued. Despite the TSE gold subindex's recent gains, it remains at its lowest levels since early 1993. ÿ"Gold shares always become more sensitive to changes in the gold price when they are near their highs or near their lows," said David Christensen, an analyst at Merrill Lynch & Co. in San Francisco. ÿAnalysts suggest a few gold producers as investment choices. ÿ"I'm not recommending that people go to an overweight stance in this group yet," said Flores. ÿIng said he favors strong, mid-cap gold producers and is advising clients to buy Kinross Gold Corp., Agnico-Eagle Mines Ltd. and Prime Resources Group Inc. ÿChristensen said Merrill Lynch has been advising clients toward Euro- and Franco-Nevada Mining Corp., Barrick Gold Corp. and Newmont Mining Corp. ÿFlores said he is recommending Barrick, Meridian Gold Inc. and Iamgold Corp. ÿ