Gold SWOT: Central Bank Gold-Buying Continued in February
The comments below are an edited and abridged synopsis of an article by Frank Holmes
Last week, gold futures closed the week at $1,992.60, down $23.20 per ounce, or 1.15%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher/lower by 4.42%. The S&P/TSX Venture Index came in off 3.71%. The US trade-weighted dollar gained just 0.15%.
Holmes discusses strengths (best-performing metal was platinum; central bank buying of gold; and Korea’s strong demand for gold); weaknesses (worst-performing metal was silver; Regis Resources reported lower March quarter production; there were two gold heists in one week—Toronto and Vancouver); opportunities (if spot prices prevail there is a 54% upside risk to 12-month forward consensus earnings for gold miners on average; the recent financial sector crisis was a key element behind the 9% increase in gold through March); and threats (Barrick’s first-quarter earnings per share likely coming in below Wall Street estimates; large-cap streamers may have a weak first quarter).