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Ftse Gold Miners Slip On Talk Of End Of Systemic Risk

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Precious metal mining stocks were in the doldrums as top City analysts forecast an end to a period of "systemic risk" that was triggered by the banking crisis.

Citigroup argued there will once more be a level playing field between base metals and precious commodities because the bank's economists are forecasting a period of slow growth that is not accompanied by systemic risk.

Jon H Bergtheil, an analyst at Citigroup, said: "Gold shares have typically traded at more expensive multiples than base metal shares, particularly during times of systemic risk." However, Mr Bergtheil concluded that: "In 2011, we think only gold shares with good production growth will still be afforded this luxury." As a result, he donwgraded African Barrick Gold to "hold" and second liner Hochschild Mining to "sell". African Barrick Gold slipped 6 to 611½p and Hochschild Mining fell 9.1 to 362½p.

Mr Bergtheil also downgraded Lonmin to "hold". Platinum is the 'industrial metal' among the precious metals and Citigroup had hoped that in the fourth quarter of 2010 there would be a stronger trend in auto demand growth. However, according to Mr Bergtheil, this now looks unlikely. And with the fourth quarter being the quarter in which Lonmin has to shut down its smelter for a rebuild, Mr Bergtheil believes it is going to be a tough near-term newsflow environment for Lonmin. The shares dipped 30p to £15.77.

Wow a top analysts makes a prediction that the period of system risk is over. I'm relieved all this talk of double dips and the fact that the debt mountain remains I was worried the 5h1t might hit the fan, luckily I've now read a top analysts forecast that systemic risk has ended.

Anyone know how accurate this top experts previous forecasts have been?

Did he predict the crash?

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