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Gold & Silver










BMO’s Coxe advocates overweighted positions in gold, base metals
By: Dorothy Kosich
Posted: '16-JAN-07 08:00' GMT © Mineweb 1997-2006



RENO, NV (Mineweb.com) --In spite of a slowing U.S. economy, a housing slowdown, strong oil prices, soaring precious metals prices, and tightening by all major central banks, BMO’s Global Portfolio Strategist Donald G.M. Coxe noted financial markets performed splendidly in 2006.

In his latest investment article, Coxe recommended that investors continue to maintain an overweighted position in gold whether through mining company stocks or the ETF.

Coxe suggested that “the serial debauching of corporate bonds and the dissemination of junk derivatives through the financial system means that, if a true global slowdown comes, system risk will return.” Therefore, he proposed that “gold’s true value these days is not as an inflation hedge, but as a protection against serious problems for the dollar and/or the financial system.”

Despite declining base metals prices, Coxe continues to be bullish on copper, zinc and other metals. “When global economic growth once again turns upward, the base metals will lead the commodity recovery, because their supply/demand profile is clearer than that of oil, and they aren’t burdened with the mystique of gold,” he advised.

Coxe advocated that investors continue to maintain an overweighted exposure in mining stocks with long reserve life indicts in politically secure regions. Base metals have no OPEC to stop their downward corrections, but great orebodies are still rare, and the mining majors are richer than before.”

“Takeovers will continue, so stocks of strong companies will not fall as far as metals prices. Whenever the global recovery resumes, base metals should be the top-performing commodity asset class,” he claimed.