S&P thinks a break below the recent low price of $252 per ounce reached in August 1999 is unlikely, and that any such break is unsustainable since the current price is some $100/oz. below replacement cost.
Fundamentals for gold mining stocks, and the metal itself, are positive on lower output, weak financial markets and a deficit in supply versus demand.
S&P is still positive on selected gold stocks and has 4 STARS (accumulate) recommendations on Barrick Gold (ABX
) and Newmont Mining (NEM
S&P also has 3 STARS (hold) recommendations on Homestake Mining (HM
) and Placer Dome Inc. (PDG
). Larkin is an equity analyst for Standard and Poor's