Gold Shares Rally, CIBC Highlights Top Picks
Gold shares remained firmly in positive territory in mid-day trading on Thursday, with the Philadelphia Gold & Silver Index (XAU) up by 2.0% at 172.95. In doing so, the XAU reached its highest level since April 3rd and has now climbed 14.6% since the beginning of August.
Commenting on the outlook for the sector, analysts at CIBC World Markets wrote in a recent note to clients that “While the seasonal fall rally in the sector should come as no surprise, it typically is more lackluster in an election year. We continue to believe that 2013 will be the bigger year for gold and gold equities, as both typically post stronger performance post a US Federal election.”
However, the firm added that “This time does appear a little different though, as the DXY (U.S. Dollar Index) appears to have peaked back on July 24th, same day the XAU troughed, and the market seems to be pricing in QE3 sooner rather than later.”
In terms of specific gold stocks, CIBC asserted that “For leverage to higher gold prices look to such names as Yamana Gold (AUY) and Newmont Mining (NEM), with Yamana acting as a leader based on technical metrics. If you’re looking for laggards, IAMGOLD (IAG) and Kinross Gold (KGC) both fit the bill lagging 6% and 12% respectively. For another strong technical leader and brand name look to Agnico-Eagle Mines (AEM). Lastly for robust production growth of 24% YoY in 2013 and our top pick, Goldcorp (GG) is the name we would buy in large cap land.”
In mid-day trading, shares of the aforementioned gold miners moved higher as follows:
AUY – 1.6% to $17.46
NEM – 1.6% to $50.43
IAG – 2.1% to $13.42
KGC – 1.5% to $8.97
AEM – 1.0% to $48.20
GG – 2.6% to $41.92
2012-09-06 13:16:39
Source: http://www.goldalert.com/2012/09/gold-shares-rally-cibc-highlights-top-picks/
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