Commodities Are Mixed, Dollar Weighs on Precious Metals
Gold lost strength amid the firmer dollar and improved global sentiment. The firmer dollar weighs on dollar-denominated commodities like gold and silver.
The PowerShares DB Base Metals ETF (DBB) rose 2.7%, while the SPDR S&P Metals & Mining ETF (XME) rose 3.8% in the week ending June 23.
First Majestic Silver (AG) has a three-year correlation of ~0.71 with gold and a year-to-date correlation of ~0.64.
Franco-Nevada, Eldorado Gold, IamGold, and Harmony Gold Mining have RSI readings of 47.1, 35.1, 66.2, and 27.9, respectively.
Goldcorp (GG), Yamana Gold (AUY), and Hecla Mining (HL) have fallen 4.1%, 15.7%, and 1.1% year-to-date, respectively. However, Gold Fields (GFI) has risen 14.6% year-to-date.
On June 19, gold futures for July expiration touched the day’s low of $1,243.00 and ended at $1,245.30 per ounce.
The gold-silver spread touched a peak of 85 in late 2008. The RSI level of the gold-silver ratio is 80.8, suggesting a possible pullback in the spread.
Gold is stronger amid the pullback in the dollar and dented global sentiment. The weaker dollar supports dollar-denominated commodities like gold.
At 7:30 AM EST on June 22, West Texas Intermediate crude oil futures contracts for August 2017 delivery were trading at $42.78 per barrel—a gain of ~0.59%.
About 56% of the analysts covering Agnico Eagle Mines (AEM) have recommended a “buy” for the stock, while 11% recommend a “sell.”
Agnico Eagle Mines’ (AEM) 1Q17 results were better than expected on both revenues and earnings.
Agnico Eagle Mines (AEM) has the highest forward valuation multiple of 12.6x, which is a 51% premium to its close peers.
As of June 20, 50% of the analysts covering Yamana Gold (AUY) stock have recommended a “hold,” while 38% of the analysts have issued a “buy.”
Yamana Gold (AUY) faces short-term concerns related its production and costs.
For Kinross Gold, the analyst recommendations are equally divided between “buy” and “hold” at 44% each, while 11% of the analysts recommend a “hold.”
Kinross is a high-cost gold miner among peers, but it’s upping its production growth by improving its potential growth pipeline and reducing its unit costs.
Of the 19 analysts covering Newmont Mining (NEM), 53% have issued “buy” recommendations, while 42% have issued “hold” recommendations.
Newmont Mining (NEM) has emerged as a leaner and more flexible mining company over the past two or three years by shedding its non-core assets.
After outperforming peers by a wide margin, Barrick Gold (ABX) has lagged behind so far in 2017.
As of June 20, 2017, 52% of analysts covering Goldcorp (GG) have recommended a “hold” on the stock.