As commodity companies continue to support the leading index, precious metal miners have received an extra boost from analysts at JP Morgan Cazenove.
The bank has raised its target for gold by 9% to $1,200 an ounce and for silver by 5% to $18.85 an ounce. They said:
After stalling briefly in July, gold and silver prices have continued their upward march in recent months, as doubts over the strength of the economic recovery persist against a backdrop of loose monetary policy. Very low US and European central bank rates have yet to translate into decisive economic growth figures, whilst fuelling fears that inflationary conditions are being created. Low yields on government debt in combination with high government deficits have encouraged money to flow into gold-backed ETFs. Gold has also continued to enjoy a perceived safe-haven status as an alternative to holding currency. This perception is enhanced by the fact central banks have become net buyers globally as European central bank gold sales have stopped after 10 years.
Fresnillo
As for individual companies, Mexican miner has climbed 40p to £12.82 as JP Morgan lifted its target price from 990p to £14, calling it a "safe default investment" with strong near term growth and solid cost control.
The bank also likes the look of African Barrick Gold, up 12p to 602p. It has raised its target price from 755p to 900p, saying it had the highest sensitivity to the gold price rise.
But it cut Hochschild Mining from overweight to neutral, helping to send the company's shares down 9p to 436p.
