For Immediate Release

Chicago, IL – October 22, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include Barrick Gold (ABX), Eldorado (EGO), Goldcorp (GG), Freeport-McMoRan (FCX), Pan American Silver (PAAS), Market Vectors Gold Miners (GDX), S&P 500 SPDR (SPY) and Gold SPDR (GLD).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Gold Miners’ Margin Problem

As gold sets new highs, it would only be natural to assume that profit forecasts for gold mining companies would be soaring too. Surprisingly, profit forecasts are not jumping.

Though some brokerage analysts have raised their full-year projections in recent weeks, the Zacks Consensus Estimate is not moving higher for most gold miners. Rather, it is essentially unchanged for Barrick Gold (ABX), Eldorado (EGO), Goldcorp (GG)

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The Dow Jones industrial average moved up 132 points on Tuesday and all major indicators rose more than 1% as the Australian central bank’s decision to raise interest rates boosted optimism about the world economy.   Investors' show of confidence ahead of a flood of corporate earnings reports came as Australia became the first major country to raise interest rates since the onset of the financial crisis last year.  The move signals that policymakers see that country's economy as strong enough to withstand higher borrowing costs. That touched off hopes that other economies might also be growing.

Australia's decision dented demand for the U.S. dollar, which, in turn, raised commodities prices.  US energy and materials stocks moved up, oil also rose, and gold reached a record high.  Stock investors cheered the drop in the dollar because it boosts corporate profits by making U.S. goods cheaper for overseas buyers.

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News that oil-producing countries are in talks with oil-consuming countries to denominate future transactions in a basket of currencies rather than in dollars sent the U.S. dollar to new lows and gold to new non-inflation adjusted highs of $1,045 before settling around $1,039. Portfolio manager Brian Hicks spoke with Stacey Delo from Marketwatch about whatrsquo;s behind goldrsquo;s big move upward today and whether todayrsquo;s move is just the beginning of a long-term trend for the precious metal. Hicks believes the trend has legs and has even moved his price target higher. My original target was $1,100 by year-end, and I think where the dollar is now and the potential for it to go lower between now and the year end, I think I have to move that target up a bit to $1,150, maybe $1,200 by year-endhellip; Wersquo;ve tested $1,000 an ounce on several occasions over the last 18 months and now wersquo;ve ...

News that oil-producing countries are in talks with oil-consuming countries to denominate future transactions in a basket of currencies rather than in dollars sent the U.S. dollar to new lows and gold to new non-inflation adjusted highs of $1,045 before settling around $1,039. Portfolio manager Brian Hicks spoke with Stacey Delo from Marketwatch about whatrsquo;s behind goldrsquo;s big move upward today and whether todayrsquo;s move is just the beginning of a long-term trend for the precious metal. Hicks believes the trend has legs and has even moved his price target higher. My original target was $1,100 by year-end, and I think where the dollar is now and the potential for it to go lower between now and the year end, I think I have to move that target up a bit to $1,150, maybe $1,200 by year-endhellip; Wersquo;ve tested $1,000 an ounce on several occasions over the last 18 months and now wersquo;ve ...

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy.

• Michael Ehrmann and Panagiota Tzamourani (European Central Bank): Memories of high inflation, September 2009. Inflation has been well contained over the last decades in most industrialized countries. This implies, however, that memories of high inflation are likely to fade, because over time larger parts of the population have never experienced high inflation, whereas those who have might forget. This paper tests whether memories of high inflation affect agents’ preferences about the importance attached to price stability, using a large database covering over 52,000 survey responses from 23 countries over the years 1981-2000. It finds that memories of hyperinflation are there to last, whereas those of less drastic inflation experiences tend to erode after around 10 to 15 years. The recent decline in

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Gold was steady on Monday after briefly falling below $990 an ounce, as the euro trimmed some losses versus the dollar, but bullion looked vulnerable to a long liquidation after it failed to stay above $1,000 an ounce.

Physical demand was also supportive for the precious metal, traders said, who saw the jewellery demand picking as as the festive period in India, one of the top gold consumers of the world, approches.

Spot gold was at $991 an ounce by 1121 GMT, slightly up from $990.95 an ounce late in New York on Friday, when gold hit a two-week low of $984.70 an ounce.

“The stronger dollar is the reason which pushed gold below the $1,000 an ounce level,” said Eugen Weinberg, Commerzbank analyst said. “On the other hand, we’d expect a pick-up in physical demand if prices decline ahead of the festive season.”

Gold’s inverse relationship with the dollar over the past few weeks

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With prices testing their record high of $1,033 an ounce set last year gold has again become the hot topic of conversation.

But while many analysts are focusing on threat of inflation – which could be a byproduct of the U.S. Federal Reserve’s reluctance to withdraw monetary stimulus – investors should really be watching China.

“In the post-financial crisis global economy, China is quickly becoming the proverbial ‘800-pound gorilla’ – the player that has to be courted, but that can’t be tamed,” said Money Morning Contributing Editor Peter Krauth.

In a recent article for Money Morning, Krauth said that he believes the stage has been set for gold to make a lasting run above $1,000 an ounce, in no small part because of China.

For the past six years China has quietly been stocking up on gold, boosting its holdings of the yellow metal to 1,054 metric tons from 400

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In the spirit of not suffering from confirmation bias, in today’s Notes we will try to make the bearish case against gold. So before you storm Notes HQ in Buenos Aires craving blood, hear us out. Many of our staff here love gold and have long term holdings.

This issue is entirely in the contrarian spirit of playing devil’s advocate. So put your pitchforks down. Take a deep breath. There is plenty of space to poke holes in (or rant) about our thesis by writing to info@contrarianprofits.com

So here it goes. The four reasons you shouldn’t buy gold today…

Reason 1: Did you know that the seventh largest holder of gold in the world is not a country, but an exchange traded fund? Yes, gold ETF SPDR Gold Shares (GLD) has amassed the seventh largest gold reserve in the world. This fund holds more gold than China, Switzerland, Japan, the United Kingdom or the

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Gold prices extended gains above $1,010 an ounce in Europe on Friday as the dollar index’s <.DXY> tumble to one-year lows fuelled interest in the precious metal as an alternative asset.

Its gains lifted prices of other precious metals, with silver and platinum both rallying to multi-month highs in its wake.

Spot gold rose to a high of $1,011.55 an ounce, its firmest since February 2008, and was bid at $1,009.50 an ounce at 1437 GMT against $995.50 late in New York on Thursday.

Citigroup analyst David Thurtell said the dollar was providing most support to gold. “The dollar seems like it could be heading for $1.50 against the euro. There are bound to be people seeking currency hedges, and gold’s a good one,” he said.

Nonetheless, gold’s inability to hold above the $1,000 an ounce level in previous runs higher was likely to encourage profit taking at these levels, he said, while an increase

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The commodity markets are surging today. Are the bulls charging because of investor fear or is something else going on? Here’s the answer.

There is a buzz in the commodities markets this week. Just about anything that can be pulled from the ground is surging in value. Everything, that is, but natural gas.

Most notably, gold is just about ready to reach over the critical $1,000 level, proving that investors are looking for safety. Even without a hint of inflation, the precious metal has surged by over 5% so far this week.

The quick run means the world’s gold miners are surging in value. The more leverage packed into their balance sheets, the higher their prices are going to go.

So far, Yumana Gold (NYSE:AUY) is up by nearly 20% this week, while AngloGold Ashanti (NYSE:AU) is up by over 15%.

It is a similar situation for the silver industry.

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