(Source: GoldAlert.Com) Gold and silver equities did not participate in the rally in precious metals Tuesday, as the Philadelphia Gold & Silver Index (XAU) dipped 0.4% to 205.69. Gold futures advanced $11.90 to $1,515.10 per ounce, while silver rallied $1.23 to $38.35 per ounce.
Notable decliners included XAU components Goldcorp (GG), Newmont Mining (NEM), and Pan American Silver (PAAS). In early afternoon trading, GG, NEM, and PAAS fell 0.8%, 0.6%, and 1.2%, respectively.
The XAU, a basket of the world’s largest gold and silver companies, is now lower by 9.2% year-to-date, compared to gains of 6.6% and 24.1% for gold and silver bullion, respectively. The disappointing performance of most large-cap precious metals equities has left investors wondering what it will take to propel the sector higher.
Commenting on the weakness, J.P.Morgan analyst John Bridges wrote in a recent note to clients that ”While gold and silver have rallied in the last few months, precious metals equities have been left behind. We believe this is because investors are uncomfortable applying these apparently ‘peaky’ prices to equity valuations.”
Bridges went on to say that “We continue to believe in the precious metals given the unsolved crises our world is facing. The rising prices are benefiting our gold companies which are able to report additional reserves now which wouldn’t have been economic a few years ago.”
In contrast to their large-cap peers, shares of many small- and mid-cap gold and silver companies have outperformed the metals in 2011. Yesterday, hedge fund magnate John Burbank of Passport Capital stated that his firm’s precious metals investments are largely concentrated in junior exploration companies at this time.
Source link: http://www.goldalert.com/2011/05/when-will-gold-shares-catch-up-to-the-metal/
Notable decliners included XAU components Goldcorp (GG), Newmont Mining (NEM), and Pan American Silver (PAAS). In early afternoon trading, GG, NEM, and PAAS fell 0.8%, 0.6%, and 1.2%, respectively.
The XAU, a basket of the world’s largest gold and silver companies, is now lower by 9.2% year-to-date, compared to gains of 6.6% and 24.1% for gold and silver bullion, respectively. The disappointing performance of most large-cap precious metals equities has left investors wondering what it will take to propel the sector higher.
Commenting on the weakness, J.P.Morgan analyst John Bridges wrote in a recent note to clients that ”While gold and silver have rallied in the last few months, precious metals equities have been left behind. We believe this is because investors are uncomfortable applying these apparently ‘peaky’ prices to equity valuations.”
Bridges went on to say that “We continue to believe in the precious metals given the unsolved crises our world is facing. The rising prices are benefiting our gold companies which are able to report additional reserves now which wouldn’t have been economic a few years ago.”
In contrast to their large-cap peers, shares of many small- and mid-cap gold and silver companies have outperformed the metals in 2011. Yesterday, hedge fund magnate John Burbank of Passport Capital stated that his firm’s precious metals investments are largely concentrated in junior exploration companies at this time.
Source link: http://www.goldalert.com/2011/05/when-will-gold-shares-catch-up-to-the-metal/
