There we go again. The Euro shorts or Dollar longs are ralllying to their cause. Will be interesting to see how gold reacts to the Euro retracing yesterday's gains. Maybe it is a knee jerk reaction to the jobs numbers only.
Prudential opts for $470/oz gold during 4Q By: Dorothy Kosich Posted: '07-OCT-05 04:00' GMT � Mineweb 1997-2004
RENO--(Mineweb.**m) Prudential Equity Group Metals Analyst John Tumazos has raised his gold price forecast from $425 an ounce to $470 an ounce for the fourth quarter of this year.
Tumazos rated the gold industry as "Neutral" because he is comfortable with the recent gold prices in view of the current economic climate.
"We rate AngloGold Ashanti, Goldcorp, and Placer Dome each Neutral Weight and note their reserve development outlooks appear above average," he said. Tumazos rated Newmont Mining and Barrick as both Underweight "owing to concerns about the valuations reserve lives, capital costs, earnings or hedge positions."
Tumazos suggests the gold has uncoupled from the U.S. dollar. He also asserted that the EU political instability has undermined the euro, which, in turn, strengthens the position of gold. Tumazos also noted that "mine output is less and jewelry demand much more than our estimates at the beginning of this year, and the physical gold market is almost balanced."
Prudential raised its earnings estimated for AngloGold Ashanti to $1.37 per share from $1.20 in 2005, and from $1.30 to $1.74 in 2006. . . .
The earnings estimates for Barrick Gold were raised to 51-cents per share, up from 43-cents in 2007, and to 67-cents per share from 41-cents in 2006. Tumazos rated Barrick as Underweight "as we are disappointed with ABX-s announcement of higher capital costs at Pascua Lama. The price target was set at $18. . . .
The earnings estimates for Goldcorp was raised to 89-cents per share from 87-cents in 2005, and to 84-cents per share from 78-cents for 2006. The price target is $17.
Newmont Mining's earnings estimates were raised to 68-cents per share from 58-cents in 2005, to 95-cents from 64-cents in 2006. The price target is $31. "We rate Newmont Mining Underweight as there has been cost deterioration, especially in core U.S. operations," according to Tumazos.
Finally, Prudential raised its earnings estimates for Placer Dome to 29-cents per share from 26-cents in 205, to 29-cents from 27-cents in 2006. The price target is $15.
"We are particularly concerned about the $1 billion spent in the Dominican Republic and another $1 billion spent in Alaska if and when permitting succeeds," said Tumazos. "PDG might simplify its finances if it chooses to abort one of the three very large projects to lessen overall financial risk."