Six Gold Equities That Shine For RBC

Gold equities will outperform bullion over the remainder of 2007 and into 2008, according to the folks at RBC Capital. Analysts Stephen D. Walker and Michael Curran blamed the slump in gold equities on vigorous M&A activity experienced in the past 24 months, saying a pattern of underperformance has been noticed among acquiring firms directly following the announcement of their proposed acquisition.

That should change, however, given the expectation of reduced merger and acquisition activity over the next 12 to 18 months, the analysts said, telling clients to expect a drastic reduction in "M&A drag." They also predicted that a slowdown in the growth in demand for gold exchange-traded funds will be positive for gold stocks.

Another factor that should help gold equities, according to Mr. Walker and Mr. Curran, is the expectation that many gold companies will report overall improvement in operating and financial performances in 2008 as a result of new mine start-ups and the onset of new low-cost production growth.

Mr. Walker and Mr. Curran told clients to take a look at Goldcorp (GG), Kinross Gold (KGC), IAMGOLD (IAG), Centerra Gold, Jaguar Mining (JAG), and Anatolia Minerals.