Gold Pullback Presents Entry Opportunity as Fundamentals Remain Unchanged: A Wall Street Transcript Interview with Garrett S. Nelson, Vice President at BB&T Capital Markets

Wall Street Transcript

67 WALL STREET, New York - April 12, 2013 - The Wall Street Transcript has just published its Metals and Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Precious Metals, Global Iron Ore Production, Emerging Market Infrastructure Construction, Midcap and Small-Cap Consolidation Activity

Companies include: Companhia Vale do Rio Doce (VALE), Cliffs Natural Resources Inc. (CLF), Freeport-McMoRan Copper & Gold (FCX), Newmont Mining Corp. (NEM), Royal Gold, Inc. (RGLD), Teck Resources Limited (TCK), Thompson Creek Metals Company (TC), Plains Exploration & Productio (PXP), McMoRan Exploration Co. (MMR), Barrick Gold Corporation (ABX) and many more.

In the following excerpt from the Metals and Mining Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Of the metals that you cover, which do you believe represent the best opportunities for the miners right now, and what do you think is driving those opportunities? Which companies from your group have the best exposure to what you see as potential opportunities?

Mr. Nelson: At the moment, I like gold following the pullback from the record highs of approximately $1,900 an ounce reached in late 2011. Fundamentally, little has really changed for gold. The favorable supply/demand factors that have caused gold prices to appreciate for an astounding 12 consecutive years remain very much intact.

Developed countries continue to print money in record quantities, which is important for gold because debt levels and money supply have historically shown a very high correlation with gold prices. Gold is basically just a currency substitute, and if central banks continue to expand the size of their balance sheets through actions such as quantitative easing, the price of gold relative to the paper should theoretically move higher.

Gold is the consummate safe-haven, risk-off, low-beta commodity. If sovereign debt levels continue to rise, so does the risk of downgrades by the major credit agencies, which is a potential catalyst for gold. In February, Moody's stripped the U.K. of its AAA credit rating. Standard & Poor's, of course, downgraded its credit rating of the United States from AAA in August 2011, and that action caused gold prices to shoot up more than $250 an ounce in the month following the cut. During that month, gold equities rose 15% on average.

Both Moody's and Fitch have had the U.S. on negative watch for some time now, and have recently issued sharply worded warnings for Washington to get its fiscal house in order. I would say that additional ratings downgrades are the primary...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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