Gold shares rebounded from an earlier sell-off in mid-day trading on Tuesday alongside the yellow metal and broader equity markets.
The Market Vectors Gold Miners ETF (GDX), which fell to as low as $55.29 per share, was higher by $0.26, or 0.5%, at $56.44 early this afternoon. In doing so, the GDX recouped yesterday’s 0.5% slide and extended its year-to-date gain to 9.8%.
COMEX gold futures traded as low as $1,712.60 per ounce this morning, but rallied to $1,747 as the U.S. dollar turned lower against a basket of foreign currencies. The dollar’s weakness stemmed from the fact that Federal Reserve Chairman Ben Bernanke reiterated his dovish stance on monetary policy in testimony to the U.S. Senate on Tuesday.
Notable gold miners in the black included Barrick Gold (ABX) and Goldcorp (GG). ABX climbed $0.50, or 1.0%, to $49.67 per share and GG rose $0.40, or 0.8%, to $47.92 per share.
Gold stocks in the news today included Yamana Gold (AUY), which held near unchanged at $16.97 despite being downgraded by Dahlman Rose to Hold from Buy. The firm also issued a price target on AUY of $16.48 per share.
Dahlman analyst Adam Graf wrote in his report that “We initiated on Yamana with a Buy rating in August 2009. Over the past 30 months, the company has been able to successfully maintain or increase production at seven operating mines, bring into production its eighth mine (Mercedes), and bring several new assets under construction. Share performance has been among the best of the large-cap gold producers for both 2011 and 2012 YTD. We believe management will continue to deliver strong operating performance and growth. We are downgrading to Hold based on our view of valuation, as the market appears to have recognized the value of the company’s assets as we see them.”
Nevsun Resources (NSU) also made headlines after issued 2012 production forecast to 190,000-210,ooo ounces of gold, which was far below analysts’ estimates. TD Securities analyst Steven Green wrote in a note to clients that the range was “basically half of what was expected…The reason for the lowered guidance is an apparent overstatement in the reserve estimate of both tonnage and grade – which is a major negative.”
Shares of Nevsun Resources plunged $1.81, or 28.9%, to $4.53, making it by far today’s worst performer in the sector.
Premier Gold Expands Presence in Red Lake District
- The claims are located in the heart of the prolific Red Lake gold mining district, and north of Rubicon Minerals' Phoenix Gold Project
- The mineralized zones in the Footwall discovery area consist of narrow-vein high-grade structures with numerous intercepts grading in excess of one ounce per ton gold (or 34.29 grams per tonne)
- The partnership completed a 2011 drill program testing for extensions of the Footwall Zone and for parallel structures
- Assays from this program are expected to be released in the near future and a 2012 drill program has now started to further define mineralization and to test new target areas along the favorable horizon
