Sector Snap: Gold and other precious metals

Shares of gold miners and other precious metals companies get a boost as price rebounds

Associated Press

NEW YORK (AP) -- Shares of companies that produce gold and other precious metals rose Tuesday, as gold prices rebounded from a steep sell-off.

In midday trading gold rose 14 percent to $1,374 an ounce, a day after its worst drop since 1983. Silver also rose, while copper was relatively flat.

Sterne Agee analyst Michael Dudas said there are many theories about the dramatic drop in gold prices. But he said he thinks a less threatening stock and bond market, better exchange rates for the dollar and aggressive commodity market activity probably had something to do with it.

Dudas noted that investors, especially everyday ones, weren't very enthusiastic about gold companies even before the recent drop in gold prices. But he said certain miners still offer attractive returns. He pointed to Newmont Mining Corp., Coeur d'Alene Mines Corp. and Gold Resource Corp, all of which he rates "Buy."

Newmont shares rose 40 cents to $34.32, Coeur d'Alene a cent to $15.06 and Gold Resource edged down 5 cents to $9.64.

Elsewhere in the sector Freeport-McMoRan Copper & Gold Inc. rose 17 cents to $29.44, a day after plunging 8 percent with the biggest drop in the S&P 500 index.

U.S. shares of BHP Billiton Ltd. rose $1.66, or 2.6 percent, to $66.43 on Tuesday, Rio Tinto PLC added 83 cents to $45.62 and Southern Copper Corp. rose 33 cents to $32.51.

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