Gold Stocks Drop Opens Opportunities
Steven Butler, senior precious metals analyst at Canaccord Genuity, didn't expect mining equities to fall as hard as they did after the gold price tumbled from a high of $1,900/oz. But the unexpected plunge has created some welcome bargains in the space. In this exclusive interview with The Gold Report, Butler talks about some equities unfairly bullied by the market that have promising projects underway. The Gold Report: Gold is down $100/ounce (oz.) and I think investors want some salvo. Is this a buying opportunity? Steven Butler: Yes, it is. We set a 12-month target at the end of July suggesting a peak of $1,750/oz. for gold and $45/oz. for silver. Gold shot up to $1,900/oz.—a little bit too far, too fast in August given the unchanged macro conditions. The world hasn't changed dramatically in terms of all the macro conditions affecting Europe and the U.S. We predicted that there could be a chance for gold to pull back, but we didn't think that equities would pull back as much because they hadn't followed the gold price as high. Yet, in many cases the equity pullback was harsher than what we saw in the gold price.