GOLD SILVER PRICE NEWS ~ The combination of bearish broker comment and weakness in the gold price weighed on Randgold Resources last night, with the mining group beginning the third quarter as one of the weakest of the blue chips.
The stock was 80p behind at 5,175p as gold prices slipped to their lowest levels in six weeks. The pullback came as reassurance on Greece's debt woes emboldened investors, who switched their attention to riskier options.
Gold tends to benefit in times of stress – but growing confidence in the eurozone's ability to deal with its debt issues triggered a reversal. The price was also held down by a strengthening dollar, with the yellow metal easing to around $1,483 (£923) an ounce in late-afternoon trading.
Adding pressure on Randgold, which runs mines in Mali and the Ivory Coast, was a new circular from Morgan Stanley, warning the stock was "priced for perfect execution".
"We believe Randgold's growth profile, sizeable reserves and management track record have warranted a premium valuation," Morgan Stanley said, commencing coverage of the stock with an "underweight" stance.
"However, we expect the execution risk profile to rise as it transitions to underground mining and highlights rising industry-wide taxation risks amid high commodity prices that have prompted some governments to consider imposing additional taxes," Morgan Stanley said. Read More
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