real-time news and commentary for investors
Friday, Oct 4
Jefferies expects gold miners to fall further
- Some may think gold equities are cheap given the dramatic decline in share prices, but Jefferies analyst Peter Ward "strongly" disagrees, and believes higher interest rates will be the key to force gold prices modestly lower to $1,250/oz.
- Newmont Mining (NEM) is Ward's focus if investors are looking for a specific gold mining stock to sell short; it already was hit hard this week on speculation it would bid for Peru's Las Bambas copper mine.
- Ward's favorite mining stock is Freeport McMoRan (FCX), seeing it as a better value than others.
- He suggests a pair trade of going long the SPDR physical gold ETF (GLD) while selling short NEM, Barrick Gold (ABX), Kinross Gold (KGC) and Goldcorp (GG) in equal lots.
- ETFs: GDX, GLDX, PSAU, NUGT, DUST, GGGG, RING.