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Tuesday, August 2, 2011

Gold stocks Review august 2 2011, Centerra Gold, Gold Miners ETF (GDX), Eldorado Gold

Gold stocks Review august 2 2011, Centerra Gold, Gold Miners ETF (GDX), Eldorado Gold : Gold stocks climbed higher Tuesday morning as the Market Vectors Gold Miners ETF (GDX) advanced $0.41, or 0.7%, to $57.78 per share. Strength in gold stocks and the GDX was fueled by the surging gold, which hit a series of new record highs today. Spot gold touched a new all-time high of $1,640 per ounce on concerns that the U.S. economy may be slipping into a double-dip recession.

Gold stocks in the news on Tuesday included Eldorado Gold (EGO0, which reported second quarter earnings in-line with analyst expectations. However, the company cut its full-year production guidance by roughly 4% to 700,000 to 725,000 gold ounces at cash costs of $390 to $410 per ounce. Shares of EGO fell $0.06 to $17.35

TD Securities analyst Steven Green maintained the firm $24.00 target price on shares of EGO, noting that “We view the guidance reduction as a relatively minor issue — the company is still in a position to potentially meet the lower end of the original guidance range. This is just a delay in the treatment of the Efemcukuru concentrate with the mine now fully operational.”

Other gold stocks in the news Thursday included Centamin Egypt (CEE.TSX), which announced second quarter operational results. Gold production in the quarter was 48,000 ounces at cash costs of $606 per ounce versus expectations of 50,000 to 60,000 ounces. Centamin revised its 2011 guidance lower from 250,000 to 290,000 ounces to 200,000 to 210,000 ounces. Shares of Centamin plunged 16.3% to C$1.80 per share early Tuesday.

Dundee Securities noted that “While the stock is down significantly, it’s yet to be seen at this point whether the issues hampering the stock are temporary or expected to be longer-lasting. The company has indicated that this is temporary and things have returned to normal and a massive overreaction by the market may provide a buying opportunity for investors willing to tolerate the country risk in exchange for exposure to an impressive gold deposit.”

Centerra Gold (CG.TSX) was another gold stock in the news Tuesday, reporting second quarter earnings of $0.30 versus consensus analyst expectations of $0.36. Scotia Capital’s analyst Trevor Turnbull, who has a C$22.00 one year price target, noted: “Gold production was 4% better than our forecast although partially offset by 5% higher total cash costs. There are no changes to 2011 production or cost guidance of 600,000-650,000 oz at $460/oz-$495/oz. However, materially higher depreciation from amortization of waste removal, greater stock-based compensation costs, and an expanded exploration budget from the ATO discovery greatly reduced earnings.” Shares of Centerra fell 2.3% to C$18.29.

Helping to boost gold and the gold stocks was news that the Bank of Korea increased the amount of gold it holds for the first time in 13 years. The move is likely an effort to diversify its portfolio away from the U.S. dollar.

Other notable gold stocks moving higher included GDX components Agnico-Eagle Mines (AEM) and AngloGold Ashanti (AU). AEM and AU rose 0.4% and 1.0%, respectively. For the latest updates PRESS CTR + D or visit Stock Market news Today

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