Eight silver and gold miners hit with Canaccord downgrades
Canadian investment bank Canaccord Genuity has downgraded eight gold and silver stocks in response to weak metals market trends.
Canaccord's metals outlook is weak: The 12-month gold forecast is now $1,350, falling $400. Silver forecast is at $23 after losing nearly $10.
But the analysts, led by Rahul Paul, say the downgrade reflects their belief that gold and silver prices will recover just not in the short-term.
"We remain optimistic that the gold price should move substantially higher longer term," the report cited. "… the current environment will likely not justify development of meaningful new gold projects and could lead to reserve declines in the sector thereby leading to declining global mine supply going forward."
A full recovery will likely take longer than 12-months, the analysts write, but "gold's status as a precious metal, reserve asset and inflation hedge is unlikely to change."
The team forecasts gold prices will hover around $1,350 and silver at $23 until 2017.
Downgrades among producers include Alamos Gold, Galane Gold, Golden Star, New Gold and Pan American Silver.
Three exploration and development companies also struck out: Golden Queen Mining, Midway Gold Corp and Goldrock Mines were all downgraded with Midway going from speculative buy to sell.
Creative Commons image by: Lina F.