$1,200 key level for gold miners


"Free cash flow is king," write Credit Suisse's Anita Soni and Robert Reynolds in their gold company outlook, and those miners who have more of it (see chart) will see the best stock performance. Top picks are Agnico-Eagle (AEM -1.3%), Kincross (KGC -2.4%), and Osisko (OSKFF -2.5%).

The current price of gold near $1,200 is key, and if the metal stays near that level in 2014, expect Newmont Mining (NEM -3.6%) to consider a dividend cut, and Eldorado (EGO -3.9%) and New Gold (NGD -4.1%) to defer capital-spending plans. Agnico too would have to consider more cost cuts or a dividend trim to avoid drawing on its credit line.

Iamgold (IAG -2.1%) would have to convince its JV partner to shut down Sadiola or consider exiting the partnership.

Comments (6)
  • MisterJ
    , contributor
    Comments (1173) | Send Message
     
    And I always heard gold was a safe hedge against inflation?!? Guess that's not even true for gold miners. Forget about it.
    25 Nov 2013, 04:50 PM Reply Like
  • 360_Degree_View
    , contributor
    Comments (27) | Send Message
     
    You must remember that we are not living in normal investment times nor are we investing in a truly government free capitalist markets. Because the gold market is relatively small vis-à-vis equity and debt markets, they are easily manipulated by those parties not wishing to see the petrodollar's value decline against gold. Having been an investor for well over forty three years and a gold investor well over thirty eight years, I've learned late in my investing life that all markets are manipulated to some degree or other. It has been in dealing with gold that it is far and away the most corrupt and manipulated. Why? Just ask yourself this: The last time the government offered an audit and a limited public viewing was in 1974, forty years ago next year....... why no more since then? The government does however CLAIM that US gold bullion holdings are audited annually. The government has also claimed: 'I never had sex with that woman', 'Read my lips, no new taxes', 'I smoked but didn't inhale', 'If you like your Doctor, you can keep your Doctor, period', 'I'm not a crook', 'We [US] were attacked by enemy forces in the Gulf of Tonkin' and on and on.
    25 Nov 2013, 09:50 PM Reply Like
  • icabodeeb
    , contributor
    Comments (2) | Send Message
     
    Yes, Yes, and Yes. The Fed and it's big bank buddies do manipulate markets, and Gold is 1# on their hit list. The miners can't complain, they are US corps. or under US influence.
    27 Nov 2013, 04:35 PM Reply Like
  • icabodeeb
    , contributor
    Comments (2) | Send Message
     
    Retired Manufacturer, degree in Finance.
    27 Nov 2013, 04:35 PM Reply Like
  • BizValueMan
    , contributor
    Comments (3) | Send Message
     
    Remember, investments are long term solutions. Over a 80 year life span a few years is trivial. In other words, the price of gold this year and the next are trivial.

     

    I'm a die hard gold bear so I love seeing the weakness, but the reasons behind this are from a deep bias and not important. When you take the bias out of the equation, people need to realize gold is a going through a sensible pullback after the gold bubble burst. The Dow did this throughout 2008 and 2009. Gold will come back and, for the record, 120 is a great place to buy GLD. When it was at 170, 120 was the best place to buy it.
    25 Nov 2013, 10:46 PM Reply Like
  • SILVERSHARK110
    , contributor
    Comments (21) | Send Message
     
    I selIAMGOLD and I Buy SVM
    26 Nov 2013, 06:08 AM Reply Like
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