Gold Stocks Get Price Hikes As Bullion Surges
Source: FP Trading Desk (1/13/08)
With gold quickly approaching the $900 per ounce mark, analysts are racing to keep pace with both the metal and the soaring shares of miners. Raymond James hiked its forecast for bullion to $903 from $750 in 2008, to $880 from $770 in 2009, and to $750 from $675, thereafter.
Silver got a similar treatment with the firm raising its average price target for 2008 by $1.50 to $15, by $2.50 to $14.50 in 2009, and by $1 to $13, long term.
“We believe that 2008 continues to be a volatile year for gold based on its late 2007 activity and early start to 2008 with increased sensitivity to geopolitical tensions (Pakistan, Iran) and fear of record oil prices (resulting in inflationary pressures for the average consumer and more specifically, cost pressures for producers),” analyst Paul O’Brien wrote in a note to clients.
After gaining 14.5% in the third quarter of 2007, gold surged another 12.1% in the fourth quarter, averaging $789 per ounce, he added. The weakening U.S. dollar, rate cuts by the Federal Reserve, record levels of investment demand as measured by the streetTRACKS Gold Trust (GLD), and carry over credit, liquidity and housing concerns in the U.S. were all cited as drivers of strength for gold and related equities.