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Nearly all gold and silver stocks have witnessed a surge in recent days thanks to the precious metals rally and with gold prices set for further upside movements, investors may seriously consider gold or silver stocks..

10 Aug 2011

CHICAGO (Commodity Online): Nearly all gold and silver stocks have witnessed a surge in recent days thanks to the precious metals rally and with gold prices set for further upside movements, investors may seriously consider gold or silver stocks, some analysts said.

"Investors looking ot hold precious metals in their portfolio may consier gold plays sucha s Anglo Gold Ashanti (NYSE:AU0, Newmont Mining (NYSE: NEM) while attractive silver stocks are First Majestic Silver (TSX:FR), Endeavour Silver (NYSE EXK),according to Wall St Cheat Sheet.

The notable gains made by silver and gold stocks as on Tuesday are : Silver Wheaton Corp (NYSE: SLW) up 6.62% at $35.44, Gold Corp Inc (NYSE GG), up3.64% at $48.13 with martket capitalisation of 38.87 bn, Yamana Gold Inc (NYSE :AUY) 5.13% up at $14.14, Barrick Gold Corp (NYSE: ABX) up 3.47% at $47.74, Silver Standard Resources (Nasdaq: SSRI) at $25.66 up 4.10%, New Mont Mining (NYSE: NEM) up 2.35% at $55.40 with a market cap of $27.38 mn, Pan American Silver Corp (NasdaqGS: PAAS) 4.09% up at $28.79 with a market capitalisation of $3.10 bn and Anglo Gold Ashanti 2.2% up at $42.86 with a market cap of $16.53 bn

Gold is not in a bubble and is set to go higher. Apart from investment demand, the increasing cost of extracting gold from the ground is also pushing up prices, according to Mark Cutifani, CEO of Anglo Gold Ashanti in an interview to CNBC. Gold production has been flat for the past seven years and is still 30% behind demand, he added.

The PHLX Gold /Silver sector index (Philadelphia:XAU) has risen from 194.20 to 201.22 on Tuesday.

Investopedia has suggested the following gold and silver stocks worth watching for investors:-
Silver: Silver Wheaton Corp (NYSE: SLW),Silvercorp Metals Inc. (NYSE:SVM), Endeavour Silver Corp. (NYSE:EXK), iShares Silver Trust(NYSE:SLV),Pan American Silver Corp. (Nasdaq:PAAS). Gold: Anglo Gold Ashanti (NYSE AU), Barrick Gold (NYSE:ABX), Gold Corp Inc (NYSE GG), Gold Fields (NYSE: GFI) and Newmont Mining (NYSE: NEM)

According to Frank Barbera, precious metals stock expert and editor of the Gold Stock Technician newsletter, mining stocks are overbought. Barric Gold or Newmont Mining are trading at 13, 12 times their earnings but mining stocks hold great value on the fundamentals."On the other hand the equity market looks like it could be heading for a very substantial decline and I think that mining stocks have not shown the ability, at least not yet, to decouple from them. Now, clearly nothing is cast in stone and I sort of evaluate this day to day but, you know, if you look at the past data it really suggests that they’re going to get hit if the market goes down"


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