Commodities & Metals
How Analysts View Top Gold Stocks After Huge Rally and Earnings
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Over the past 12 months, the price of gold has dipped to a low of around $1,047 an ounce and jumped to a high of near $1,265 last week. The yellow metal is mounting a comeback on weak economic forecasts, negative interest rates in Europe and fears of the same in the United States, and volatility in the currency markets.
Shares in gold mining companies have also bounced back, for the most part, with most of the gains coming since the first of the year. Four gold miners reported earnings last week — Barrick Gold Corp. (NYSE: ABX), Newmont Mining Corp. (NYSE: NEM), IAMGOLD Corp. (NYSE: IAG) and New Gold Inc. (NYSEMKT: NGD) — and analysts were quick to raise price targets while leaving ratings alone.
In comments related to Barrick, analysts at S&P Capital IQ said:
Our risk assessment reflects [Barrick]’s exposure to markets for gold and copper, both cyclical commodities, along with the challenge of replacing reserves, partly offset by our view of its strong balance sheet and its pipeline of growth projects.
That’s a succinct statement of how to evaluate the metals market right now.
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