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Gold bullion hammered
After rising close to $910/oz in Asian trading on Wednesday, gold bullion was hammered in heavy waves of selling starting shortly after trade started in London. Within three hours, the price had punched down decisively through $900/oz, and after piercing below $890/oz, found some support, to recover a few dollars per ounce.
While many who speak on gold tend to the bullish side in times of good and bad, hunting the world for the slightest positive sign that the gold price will rise into eternity, it was on Tuesday that the Bank Credit Analyst issued a decisive recommendation: "Precious Metals Downgrade To Neutral".
Precious metals were heavily sold off on Tuesday, but found temporary support in overnight Asian trade, as mentioned. Referring to the recent bounce in precious metals prices, limited downside in the dollar against the majors, and rising risks of an oil correction (which may have set in on Tuesday), the Bank Credit Analyst said on Tuesday that it was "an opportunity to downgrade the sector from overweight to neutral. We expect ranges to emerge in gold, gold shares and silver prices. Gold should outperform silver in this environment as the latter is more dependent upon investment demand. Stay long the gold/silver ratio (GSR)".
Analysts say that technical factors support the fundamental case for a neutral weighting on precious metals. Gold prices, according to the Bank Credit Analyst, "may well have a washout below the $850/oz support level before the cyclical bottom is in place. Gold shares could return to their tight range of 2006 and the first half of 2007, as they lose ‘market share' to ETFs (exchange traded funds). The GSR could see a wave of buying if it moves back above the 200-day moving average". The next upleg in precious metal prices is seen as taking time to develop, although the Bank Credit Analyst "would buy gold for a ‘trade' on a washout below $850/oz. The bullish exception may well be platinum, although we hope to buy from lower levels".
Global tier I gold stocks | ||||
Stock | From | From | Value | |
price | high* | low* | USD bn | |
Goldcorp | USD 40.32 | -12.9% | 92.0% | 28.64 |
Polyus | USD 63.00 | -8.4% | 67.1% | 12.01 |
Harmony | USD 12.10 | -20.8% | 43.9% | 4.88 |
Lihir | AUD 3.12 | -29.9% | 15.1% | 5.59 |
AngloGold Ashanti | USD 38.16 | -25.7% | 25.1% | 10.60 |
Barrick | USD 40.79 | -25.5% | 46.8% | 35.56 |
Newcrest | AUD 32.25 | -20.4% | 62.4% | 13.72 |
Gold Fields | USD 13.35 | -31.9% | 4.1% | 8.71 |
Kinross | USD 20.14 | -26.5% | 104.1% | 12.38 |
Newmont | USD 47.67 | -17.2% | 25.4% | 20.81 |
Buenaventura | USD 64.61 | -24.7% | 107.7% | 8.88 |
Freeport-McMoRan | USD 117.64 | -7.5% | 75.4% | 45.08 |
Streettracks ETF | USD 89.36 | -11.0% | 41.0% | 17.23 |
Tier I averages/total |
| -20.2% | 54.6% | 224.08 |
Weighted averages |
| -18.2% | 54.8% | |
TIER II | Stock | From | From | Value |
price | high* | low* | USD bn | |
Zhongjin | CNY 68.65 | -57.0% | 86.1% | 3.53 |
Iamgold | USD 6.02 | -42.3% | 5.4% | 1.78 |
Simmer & Jack | ZAR 3.85 | -51.3% | 4.1% | 0.54 |
Yamana | USD 15.33 | -23.1% | 82.5% | 9.61 |
High River | CAD 1.62 | -53.7% | 0.0% | 0.49 |
Eldorado | USD 8.05 | -5.2% | 147.7% | 2.77 |
Agnico-Eagle | USD 69.47 | -16.8% | 108.9% | 9.98 |
Centerra | CAD 9.30 | -42.2% | 194.3% | 1.98 |
Randgold Resources | USD 43.04 | -23.3% | 106.6% | 3.28 |
Shandong | CNY 65.31 | -45.3% | 201.0% | 3.32 |
Peter Hambro | GBP 13.83 | -18.0% | 62.7% | 2.19 |
Hecla Mining | USD 9.19 | -30.1% | 39.7% | 1.17 |
Golden Star | CAD 3.06 | -30.1% | 15.5% | 0.71 |
Franco-Nevada | CAD 20.56 | -12.5% | 50.8% | 2.03 |
Fresnillo | GBP 5.58 | -3.0% | 11.2% | 7.80 |
JSC Polymetal | USD 8.30 | -15.7% | 84.4% | 2.61 |
Kazakhmys | GBP 16.78 | -14.6% | 76.6% | 14.89 |
Tier II averages/total |
| -28.5% | 75.2% | 68.67 |
Weighted averages |
| -24.4% | 71.2% | |
TIER III | Stock | From | From | Value |
price | high* | low* | USD bn | |
Western Goldfields | CAD 2.27 | -45.0% | 31.2% | 0.29 |
Great Basin | CAD 3.29 | -14.1% | 66.2% | 0.68 |
Sino Gold | AUD 5.52 | -37.8% | 21.3% | 1.32 |
Alamos | CAD 6.62 | -21.2% | 37.3% | 0.62 |
Highland | GBP 1.75 | -30.6% | 134.9% | 1.11 |
Pan Australian | AUD 1.08 | -14.0% | 131.2% | 1.45 |
Kingsgate | AUD 5.50 | -9.2% | 64.7% | 0.48 |
Int'l Mining | CAD 5.15 | -22.6% | 12.0% | 0.49 |
Allied Gold | AUD 0.64 | -37.9% | 82.9% | 0.23 |
First Uranium | CAD 6.59 | -49.2% | 11.3% | 0.85 |
Novagold | CAD 8.16 | -59.8% | 38.3% | 0.84 |
Pan African | GBP 0.06 | -46.3% | 7.3% | 0.12 |
Citigold | AUD 0.30 | -45.4% | 9.3% | 0.19 |
Jaguar | CAD 11.30 | -21.8% | 110.8% | 0.71 |
Pamodzi Gold | ZAR 6.66 | -66.3% | 11.0% | 0.08 |
Oceanagold | AUD 1.40 | -66.3% | 1.4% | 0.21 |
DRDGold | ZAR 6.25 | -39.0% | 78.6% | 0.31 |
Central African | GBP 0.32 | -45.8% | 16.2% | 0.10 |
Resolute | AUD 2.08 | -16.8% | 79.8% | 0.55 |
Integra Mining | AUD 0.52 | -26.8% | 285.2% | 0.18 |
Royal Gold | USD 30.18 | -14.8% | 29.8% | 1.02 |
Chenzhou | CNY 26.00 | -67.9% | 108.0% | 1.45 |
Red Back | CAD 7.46 | -18.6% | 65.8% | 1.38 |
Kazakh Gold | USD 22.11 | -25.8% | 22.5% | 1.10 |
Tier III averages/total |
| -35.1% | 60.7% | 15.76 |
Weighted averages |
| -38.5% | 54.2% | |
| ||||
DEVELOPERS | Stock | From | From | Value |
price | high* | low* | USD bn | |
Anatolia | CAD 3.66 | -47.6% | 11.6% | 0.30 |
Andean | CAD 1.64 | -26.8% | 164.5% | 0.65 |
Norton Gold | AUD 0.33 | -51.1% | 120.0% | 0.10 |
European Gold | CAD 4.53 | -37.1% | 1.3% | 0.80 |
Banro | CAD 8.17 | -37.2% | 5.4% | 0.32 |
Greystar | CAD 4.85 | -42.6% | 18.0% | 0.22 |
Medusa | AUD 1.23 | -22.4% | 33.7% | 0.17 |
Osisko | CAD 4.45 | -38.5% | 10.1% | 0.70 |
Central Rand | ZAR 16.50 | -19.7% | 27.9% | 0.53 |
Tamaya | AUD 0.12 | -67.6% | 4.5% | 0.11 |
Gabriel | CAD 2.70 | -45.5% | 112.6% | 0.68 |
Mintails | AUD 0.47 | -51.1% | 16.3% | 0.30 |
Moto Goldmines | CAD 4.00 | -34.3% | 73.9% | 0.34 |
Detour Gold | CAD 18.85 | -12.5% | 268.9% | 0.83 |
Centamin | CAD 1.34 | -16.3% | 54.0% | 1.15 |
Seabridge | CAD 23.00 | -41.0% | 48.4% | 0.84 |
Gold Reserve | CAD 2.00 | -69.7% | 28.2% | 0.11 |
Aurelian | CAD 4.08 | -60.1% | 33.8% | 0.54 |
Herald Resources | AUD 2.80 | -4.4% | 177.2% | 0.52 |
St Barbara | AUD 0.65 | -34.2% | 74.3% | 0.60 |
Jinshan | CAD 2.80 | -13.0% | 93.1% | 0.44 |
Developer averages/total |
| -36.8% | 65.6% | 10.27 |
Weighted averages |
| -35.9% | 53.3% | |
Overall averages/total |
| -31.5% | 64.3% | 318.78 |
Overall weighted averages | -21.6% | 58.0% | ||
* 12-month | ||||
Source: market data; tables compiled by Barry Sergeant | ||||
Numbers are just prior to Wednesday opening in the US and Canada. | ||||
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