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3 Stocks to Short on Citi’s Bearish View on Gold -Breaking

by Mike Robinson

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© Reuters. 3 Stocks to Short on Citi’s Bearish View on Gold

The strengthening U.S. currency caused gold prices to fall sharply in last week. According to Citigroup (C) gold prices might continue to decline in the immediate term. We believe it would be a smart move to sell gold mining stocks NovaGold Resources, Equinox Gold (NYSE :), and Osisko Royalties. Let’s discuss.Gold is considered a safe-haven asset, but gold prices plunged last week amid high inflation and a rebound in the . CNBC reports that the inflation rate hit a record high of 30 years ago. Moreover, a hawkish Bank of Canada announcement and mixed economic data contributed to the yellow metal’s price decline.

Because the Federal Reserve’s asset tapering activity is expected to begin this month, it could lead to a further decline in gold prices. According to Citigroup Inc. (NYSE:), ‘short gold’ is an appropriate pain trade over the medium-term. In addition to C, several other Wall Street analysts have turned negative on gold’s price performance this week.

We believe it would be prudent to sell NovaGold Resources Inc.’s gold mining stocks due to the bullish sentiment surrounding gold. Equinox Gold Corp (EQX), Osisko Gold Royalties Ltd . (NYSE:)

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