To:Abner Hosmer who wrote (319)
From: John Barendrecht Tuesday, Jul 8, 1997 7:26 PM
Respond to of 80051
RESEARCH ALERT - Gold mining stocks raised to buy
NEW YORK, July 8 (Reuter) - Salomon Brothers analyst Leanne Baker raised her ratings for Getchell Gold Corp (GGO.TO), Placer Dome Inc (PDG.TO) (PDG) and Barrick Gold Corp (ABX.TO) (ABX) to buy from hold Tuesday.
(a) ``Focus on value, hold your breath, and buy -- but selectively,'' she wrote in a report.
(b) The upgrade came because of the stocks' valuations. Their prices have recently dropped, pulled down by a decline in gold prices. (c) Baker set 1998 target prices of $28.25 for Barrick and $20.50 for Placer Dome. She set a 1998 target price of $36 for Getchell. (d) In New York, Barrick was up 1-1/16 to 21-5/16 and Placer Dome was up 3/16 to 14-3/16. In Toronto, Getchell was up 2.60 to 44.30.
To:Keith Zhang who wrote (318)
From: John Barendrecht Tuesday, Jul 8, 1997 7:29 PM
Respond to of 80051
NY precious metals end mixed, gold bounces
NEW YORK, July 8 (Reuter) - COMEX gold and silver futures ended higher Tuesday, with gold bouncing for the first time in six trading sessions, but NYMEX platinum and palladium futures ended lower with Russian exports of the white metals expected to resume by Thursday this week.
``Gold is way oversold technically, so a bounce was not a surprise, and funds are likely to take profits on short positions from time to time, but the market remains bearish, given the likelihood of more central bank activity,'' Refco New York economist James Steel said.
COMEX August gold ended up $2.00 at $321.00 an ounce, after recovering from Mondays's contract lows at $314.60, to see an intraday high Tuesday at $323.40. Estimated total COMEX gold volume Tuesday was a heavy 60,000 lots.
In the bullion market, spot gold ended quoted $319.80/30, compared to the London Tuesday afternoon fix at $320.80.
On Monday spot gold fixed at $318.75, its lowest levels since December 1985, after news last Thursday that the Australian central bank had sold about two thirds of its gold reserves in the past six months.
Technically, August gold reached oversold levels of only nine percent on a regular nine-day relative strength index (RSI) Monday, before closing at 16 percent Tuesday.
Similarly, the widely-followed ``Bullish Consensus'' index, published by Market Vane Corp of California reached a low of only 18 percent for gold on Monday.
COMEX gold open interest jumped a further 2,508 lots to 213,421 contracts Monday, the highest level since early 1996, when gold prices saw a seven year high around $417.00.
Net short positions held by commodity funds reached near record levels in COMEX gold at 67,001 lots on July 1, according to the latest CFTC Commitment of Traders data.
As to supply and demand factors, bullion bankers indicate central bank mobilization of gold reserves is continuing, but at current prices around half of the world's gold mines could be operating at a loss, analysts said.
The world average total costs of gold mining, including exploration, depreciation and financing charges, was around $317 an ounce in 1996, according to industry consultants, Goldfield Mineral Services (GFMS) in a report in May.
But average total costs for Australian miners was $358 an ounce, while South African mines had average total costs of $334.00 an ounce, compared with $300 an ounce for U.S. mines.
Already South Africa's Randgold and Exploration Co Ltd (RNGJN.J) has said it will halt work at its Benoni Gold Mining Co Ltd.
While many Australian and some North American miners had actively hedged their production, at average prices around $400 an ounce in the first quarter 1997, many gold miners, especially in South Africa were unhedged, analysts noted.
Barrick Gold Corp of Canada, the world's second largest gold miner, said Monday it had hedgd its gold production out to the year 2000, protecting its cash flow, earnings and dividend.
Barrick said its hedge position ensured a minimum average price of $420 an ounce for its output, while it had cash operating costs of under $200 an ounce.
The Philadelphia Stock Exchange's index of North American gold and silver stocks (.XAU) was up 3.20 pct near the close Tuesday at 89.79, after seeing a three year low at 85.79 Monday.
COMEX September silver ended up 5.0 cents at $4.335 an ounce, after seeing a fresh life-of-contract low at $4.175 an ounce early.
In the bullion market, spot silver fixed at $425.00 an ounce in London Tuesday morning, its lowest fix since November 3, 1993.
Silver had been dragged lower by ratio trades with gold, traders said. The spot gold/silver ratio jumped to 74.0-to-1 Tuesday, its highest level since late January.
Meanwhile, NYMEX October platinum ended down $6.20 at $386.50 an ounce, and NYMEX September palladium closed down $6.00 at $163.75 an ounce.
Russia's metal export agency, Almaz, reiterated Monday it would resume exports of platinum and palladium this month, after a six month suspension, with traders expecting deliveries in Zurich and possibly Tokyo on Wednesday or Thursday this week.
However, reports from Russian officials indicated exports would be only at about the same monthly rate as last year, meaning total Russian exports for 1997 could be well down on last year's levels, preventing significant rebuilding of inventories.
Market Data 
Markets 
AI
