Analysts at RBC Capital Markets forecast a rally in gold and silver prices for the second half of 2011. Gold and silver stocks will highly benefit from this rise in prices, especially the ones with strong fundamentals, “relatively low risk profiles, and liquidity,”
What are these stocks? Agnico-Eagle, Goldcorp, and Silver Wheaton are among their top picks for this rally, “We are maintaining our weighting for Precious Metals at Overweight as we believe margin expansion, dividend increases and strong seasonal performance could provide catalysts for a H2/11 rally in gold equities,” says RBC analyst.
Phillip Futures agrees with RBC on gold and silver outlook and states “Silver remains attractive as a leveraged play on gold. Silver has a strong positive correlation with gold…should gold rise to a new record high, silver is likely to benefit,” the analysts said.
Ronald Stoeferle, commodity analyst at Erste Group Bank AG, cannot agree more. He says on Bloomberg the metal is still “far away” from a mania and investors should own more gold. “Gold will rise to $2,000 in 12 months” Gold will rise to $2,000 in 12 months… Every trend ends in euphoria and excess and that's what's going to lead us to $2,300 an ounce, which is the inflation-adjusted all-time high.”
Based on the view of these analysts, our long term gold target price of $1,750 an ounce for 2011 sounds reasonable and achievable.
Speaking of gold miners, only 4 out of 46 were in red. Gold Resources (Goro) was among losers in result of the Barron's article. NovaGold lead gainers with an impressive 11.5% gain.
Real Finance has a new gold trade recommendation. Make sure to check it out.
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