according to Fosters....Today’s Top Pick. TRADING BUY GOLD...

according to Fosters....

Today’s Top Pick.

TRADING BUY GOLD EQUITIES - NST, MOY, BDR and PIR.

•We believe the recent commentary from the Fed has removed concerns of QE tapering occurring immediately which had weighed on the gold price in recent weeks. In addition, the Fed has highlighted an aspiration for 2% inflation before winding back the QE program.

•Signs of Inflation will be the next catalyst to return gold to favour. Therefore, the tapering in easing we believe will coincide with increasing inflation as the US economy continues to progressively grow, which in our view should be positive for gold prices. Oil prices at 12-month highs could be the catalyst for inflation.

•The sharp drop in the gold price this year to US$1,291/oz has been partially offset with a declining A$ resulting. The rapid change in the currency’s fortunes has provided a cushion for the producers in A$ terms (A$1,418/oz)

•We prefer exposure to quality lower cost operators who are able to maintain profitable margins despite the subdued prices and are able to get an earnings uplift from a falling A$.

•On such criteria, we like Northern Star (NST) and Millennium (MOY), which have their mines purely in Australia. We also like Beadell (BDR) who have operations in Brazil. We estimate their all-in-cash costs to be under $1,000/oz, providing each with ample net free cashflow generation under currently stressed gold prices. .

•Our pick amongst the developers is Papillon Resource (PIR)

•TRADING BUYS. Northern Star Resources (NST), Millenium Minerals (MOY), Beadell resources (BDR) and Papillon Resource (PIR)

http://www.fostock.com.au/announcements/trading-buy-gold-equities-nst-moy-bdr-and-pir