Browsing Category: "Mining Investment"
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While he dislikes owning gold shares at the moment, Jim Cramer is bullish on the gold bullion. In his latest Lightning Round session of Mad Money Program, he recommended purchasing GLD ETF at $ 140 (5% below current prices). He forecasts prices will come down a little as people see no inflation and the fact that oil is also coming down and a stronger green back is bad for gold. “but gold has gone inexorably up…buy more at $ 140. Gold is a currency and not a commodity.”
Posted on 22 June 2011. Show Highlights: About the Guest: Bill King, has authored “The King Report” for over 18 years. It is an independent view on global, political, financial, and economic factors that influence world markets. As author of the firm’s daily research, Bill’s candid observations and forecast on the economic, financial, and political forces that are impacting the markets have been extremely accurate.
Bill King Interview: Europe is the Detonator – The U.S. is the Bomb
-We are currently seeing the Collapse of Western Socialism in Europe.
-A Greek default is the first phase of a chain reaction involving Portugal, Spain, Italy…and ultimately most sovereign debt.
-During this debt “end game” scenario, it’s critical for the investor to be postured in a defensive strategy – including physical gold and cash.
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Shares of Patriot Coal (NYSE: PCX – News) are soaring 3% after Goldman Sachs upgraded the stock to “conviction buy” from “neutral” while raising its price target on the stock to $ 29 from $ 28, citing valuation and Patriot’s exposure to higher thermal coal prices. In fact, Goldman upgraded the U.S. coal sector to “attractive” from “neutral,” citing the same catalysts, but the news isn’t helping the Coal Stocks Index, which is down 0.3%.
Shares of Peabody Energy (NYSE: BTU – News), the largest U.S. coal producer, are up half a percent after Goldman upgraded that stock to “buy” from “neutral” while raising its price target on the stock to $ 75 from $ 74, citing Peabody’s international thermal coal exposure and organic growth. Missouri-based Peabody has seen its shares slide 8% in the past month.
Shares of Consol Energy (NYSE: CNX – News), the second-largest U.S. coal producer, are fractionally higher, after Goldman raised its rating on that name to “neutral” from “sell” while boosting its price target on the stock to $ 59 from $ 49, implying substantial upside from where the shares currently trade.
Walter Energy (NYSE: WLT – News) is off 2% after Goldman pared its rating on that name to “neutral” from “buy” while slashing its price target on the stock to $ 140 from $ 157. Even the lower price target implies significant upside from where Walter currently trades. Arch Coal (NYSE: ACI – News) is off 1% while Alpha Natural Resources (NYSE: ANR – News) and Cloud Peak Energy (NYSE: CLD – News) are fractionally lower.
Gold stocks have underperformed the metal most of this year… but the breakdown has been glaring since early April.
“Short-term aberrations in markets are common,” says U.S. Global Investors chief Frank Holmes, “and this isn’t the first time gold bullion and gold equity prices have diverged.” “Gold equities underperformed gold bullion in 2000 and 2008 during times of extreme market negativity and uncertainty. These previous instances have been merely temporary setbacks, and markets generally reverted to their long-term trends.” Here’s a chart Frank believes tells the full story: “Historically, one could purchase about 4.4 units of the XAU for the price of an ounce of gold. That ratio fell to less than 3 units per ounce in the mid-1990s, when gold prices bottomed, but has averaged 5.2 units during the current bull market.”
“You can see from the chart,” Frank continues, “that today’s level is 46% above the historical norm at 7.6 units to one ounce of gold. By this measure, one can purchase shares of gold mining companies at their second-cheapest level in nearly 30 years.
