Gold, Silver Shares Steady, Agnico-Eagle (AEM) Downgraded

Gold and silver shares held onto modest gains Thursday afternoon amid stability in precious metals, slight weakness in the U.S. dollar, and a broad-based rally in U.S. equity markets.

The Philadelphia Gold & Silver Index (XAU) fell 1.3% to 160.51 this morning, but later bounced back into positive territory, by 0.6% at 163.49.  On a weekly basis, the XAU is now higher by 0.9% and by 6.3% thus far in June.

Notable gold miners in the black this afternoon included Kinross Gold (KGC) and Randgold Resources (GOLD) – which climbed by 4.0% to $8.56 and by 1.1% to $91.52 per share, respectively.

On the downside, Agnico-Eagle Mines (AEM.TSX, NYSE: AEM) dropped by 1.3% to C$42.75 per share.  The catalyst for Agnico-Eagle’s sell-off was a downgrade by Dundee Securities analyst Paul Burchell, who cut his rating on the Canadian-based gold producer to Neutral from Buy.  Burchell did, however, maintain his C$47.00 price target on AEM.TSX.

Burchell’s downgrade was largely based on AEM’s significant outperformance of its peers thus far this year, rather than due to any shortcomings by the Company.  ”We applaud Agnico’s management for the steps it has taken in regaining shareholder confidence,” the Dundee analyst wrote, “and although we still view the stock as fundamentally undervalued (a trait shared with many of its peers), we believe better opportunities for share price performance may exist in some other gold producers at this time.”

As for silver stocks, the sector was mixed in afternoon trading.  Pan American Silver (PAAS) slipped by 0.7% to $18.22 per share, while Hecla Mining (HL) held near unchanged at $4.70 per share and Silver Wheaton (SLW) rose by 1.3% to $27.97 per share.