After getting shellacked yesterday, gold mining stocks are heading higher today–despite only a slight gain in the precious metal.
Bloomberg The Market Vectors Gold Miners ETF (GDX) has gained 2.6% to $29.85 today at 10:35 a.m., while Barrick Gold (ABX) has climbed 3.2% to $20.30, Goldcorp (GG) has gained 3% to $30.80 and Newmont Mining (NEM) has risen 1.9% to $32.71. The SPDR Gold Shares ETF (GLD) has ticked up 0.2% today.
Even bad news has failed to dent the rise in gold stocks today. NewGold (NGD), for instance, has gained 1.8% to $7.49 despite the fact that the wall of one of its mines collapsed. The Wall Street Journal has the details:
New Gold reported a pit fall movement at its Cerro San Pedro Mine in Mexico in which about 800,000 metric tons of material moved. It said no one was injured, but mining in the area has been temporarily suspended. It also said it expects Cerro San Pedro's 2013 production will be below original expectations.
Sterne Agee’s Michael Dudas and Satyadeep Jain remain bullish on the precious-metal stocks:
So far in August, gold and silver equities are up 13% vs gold price increase of 7%. Gold managements have been quite focused on capital and cost initiatives in attempts to adjust their business towards a lower realized price range. Like the underlying metals, we believe the shares appear to be finding a base level of valuation. With investor sentiment still quite skeptical, any supportive macro news flow could provide fuel for a rally.
Their favorites include Newmont and Coeur Mining (CDE), which they rate Buy. They rate Barrick Gold Neutral.
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