The Newcrest Mining Limited (ASX: NCM) share price could be about to come under pressure as far as one leading broker is concerned.
According to a note out of Deutsche Bank this morning, its analysts believe that the gold sector is now fully valued after its strong run following rising tensions in North Korea.
In light of this, they have downgraded Newcrest Mining to a sell rating with a $19.00 price target.
This implies potential downside of over 15% based on the gold miner's current share price.
But it isn't just Newcrest Mining shareholders that should be concerned. Deutsche has also downgraded industry peer Northern Star Resources Ltd (ASX: NST) to a sell rating as well.
Its price target of $4.40 on Northern Star's shares also implies potential downside of over 15%.
Should you sell the gold miners?
I agree with Deutsche that the gold miners look fully valued, especially now that tensions in North Korea appear to be cooling.
Unless there is a significant flare up that causes a flight to safety, I suspect the gold price could start to come under pressure over the coming months.
Especially if rates rise in the United States between now and the end of the year. As rates normalise in the United States I expect gold will lose its allure with investors, putting pressure on prices.
