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

To: long-gone who wrote (29644)	3/9/1999 7:23:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116762

Gold Equities are Undervalued, Morgan Stanley's Cohen Says Gold Equities are Undervalued, Morgan Stanley's Cohen Says New York, March 8 (Bloomberg) -- Gold mining company shares are undervalued, when compared with the price of gold, after declining during the past three months, said analyst Douglas Cohen at Morgan Stanley Dean Witter & Co. ''During the last three months gold has done nothing and the equities have traded downward so they are about 15 percent undervalued compared with gold itself,'' Cohen said in an interview. ''So, there is a reasonable chance that we'll see a rally in equities but we're not pounding the table yet.'' Gold for April delivery rose $3.20 to $292.70 an ounce on the Comex division of the New York Mercantile Exchange. Gold futures have trading mostly within a range of $285 an ounce to $290 an ounce during the last three months. The closely watched Philadelphia Stock Exchange Gold and Silver Index, a capitalization-weighted index, that includes the top U.S. precious metal mining companies is ''now about 15 percent undervalued relative to the gold price, in our view,'' Cohen said. The index, which fell to a six-month low on Feb. 26, includes Barrick Gold Corp., Coeur D'Alene Mines Corp. and Homestake Mining Co. The index was last that low in August when gold was trading at a 19-year low. ''The sector has appeared this undervalued only once before during the past six years,'' Cohen said. ''The index became about 25 percent undervalued, but then rallied 60 percent'' during September 1998. ''We still believe there will be better opportunities to play the sector aggressively later in the year, most likely in association with an anticipated increase in reflation fears,'' Cohen said. Gold Price Outlook Cohen, in a report, left unchanged the forecast for gold prices he made in January, when he predicted gold would probably trade in a range of $280 to $300 an ounce during the first half of 1999, During the second half of the year, the potential for an acceleration in inflation may lead gold prices in a ''sustained rally toward $320 an ounce,'' he said. Toronto-based Barrick Gold is Cohen's top pick among precious metals mining companies because of what he considers to be its superior assets, balance sheet and management. Barrick rose 13/16 to 18 7/8 today. Cohen's target price for Barrick in 1999 is $26. NYSE/AMEX delayed 20 min. NASDAQ delayed 15 min. Access More Information and Services Above ©1999 Bloomberg, LP. All rights reserved. Terms of Service and Trademarks.