The zany world of gold continues to surprise to the upside in 2016, peaking briefly just above $1,300 per ounce on the week ending May 6, 2016. After closing at roughly $1,288 on Friday the year-to-date rage onward and upward had gold up more than 21% measured by the SPDR Gold Shares (NYSEMKT: GLD).

There are of course reasons for gold’s surge so far in 2016. Still, one has to ask whether there has been too much of a good thing, if not for the shiny yellow metal itself, then perhaps in the gold miners.

24/7 Wall St. tracks many analyst upgrades and downgrades each day, to the tune of hundreds per week. Most analysts in 2016 have adjusted their analyst ratings and price targets up for the key gold miners during the 2016 rally.

Many of the gold miners have seen their shares rise massively in 2016. Does a rally of 83% since the end of 2015 in the VanEck Vectors Gold Miners ETF (NYSEMKT: GDX) explain that perhaps things could be getting overheated in gold miners?

Some analysts are now starting to fear that the run has been too much. Many of the gold miners are now trading well above their consensus analyst price targets. That is even after those targets have by and large been raised in recent weeks, and again, most analysts are still raising their price targets.

Investors in gold miners are not just investing in gold. It has been a leveraged gold bet in 2016 so far. But investors in gold miners and producers also have to know that they are taking on country risks, geopolitical risks, currency risks and individual company execution risks.

With this past week marking what at least so far has been a 2016 gold high, 24/7 Wall St. wanted to feature some of the analyst downgrades or more cautious views seen in recent trading days. Despite Merrill Lynch raising targets on five top gold stocks that are tracked by the firm, here are some of the cautious analyst calls in gold miners and producers.

BARRICK GOLD

Barrick Gold Corp. (NYSE: ABX) managed to rise 3.3% to $18.47 on Friday, but it was downgraded to Hold from Buy at Canaccord Genuity on Tuesday, May 3. In Canadian dollars, its target was raised to C$26.00 from C$23.50, versus C$23.83 close on Friday. This Canadian giant has a $21.5 billion market cap.

Barrick’s consensus analyst price target is down at $15.95, with a 52-week range of $5.91 to $19.50. Barrick shares are up 150% year to date.

RANDGOLD RESOURCES

Randgold Resources Ltd. (NASDAQ: GOLD) was downgraded to Sell from Neutral at Citigroup on Thursday, May 5. That did not prevent it from rising 5.5% to $89.45 on Friday, but the pre-downgrade price action had been down 10.8% at $85.29. Its earnings report signaled that production was down 11% from a year earlier.

Randgold had a consensus price target of $96.35 previously, but that target was just above $94 by the close of the week.

Randgold’s 52-week trading range is $54.88 to $101.60, and the market cap is $8.3 billion. Randgold shares are lagging, up “only” 46% so far in 2016.

KINROSS GOLD

Kinross Gold Corp. (NYSE: KGC) rose 5.6% to $5.59 on Friday, but Canaccord Genuity downgraded it to Hold from Buy on May 3. That downgrade was unusual in that the company’s price target in Canadian dollars was raised in that call. On May 4, Credit Suisse downgraded the shares to Neutral from Outperform, based on valuation, but the target was raised to $5.50 from $4.50. The reason for the downgrade was that Kinross was said to be up 210%, versus 106% year to date in the HUI index.

Kinross has a U.S. consensus price target at $4.25, and its 52-week range is $1.31 to $5.82. The market cap is $6.4 billion, though this used to be above $15 billion just five years ago. Its shares are still up over 200% (yes, two hundred) so far in 2016.

Maybe three analyst downgrades in key gold miners and producers is not enough to start raising any red flags here. That being said, if the key miners exchange traded fund has roughly doubled and many more are up even greater than that from their lows, maybe a lot of the good news is already being reflected in the shares. Either way, it is hard to not notice when stocks rise above and beyond consensus analyst targets, particularly if most analyst targets have even been raised.

As far as what is driving gold, there are multiple factors.

We now have a Federal Reserve that seems unable to raise rates as expected due to weaker economics. The dollar’s endless drive has abated somewhat. We have a U.S. presidential election candidate slate that is making almost everyone nervous on both sides of the political aisle. We have negative rates continuing in Europe, with quantitative easing slated for what may be years ahead. Japan has adopted negative rates. Europe is ending its 500 euro printed currency note, and there has even been talk that the United States should perhaps consider doing away with the $100 bill.

There are of course some other issues to consider about gold from this week.

• Credit Suisse Anita Soni and Robert Reynolds said that they continue to believe the gold rally has legs on a 12-month view. That did not prevent at least one selective downgrade on May 3.
• Reuters noted on May 4 that the iShares MSCI Global Metals & Mining Producers ETF was in the midst of pullback, but as long as support levels hold the sector’s advance should resume.
• Stanley Druckenmiller, the well-known hedge fund manager, said that the current environment is one that investors should be exiting stocks and buying gold.

Again, maybe it is too soon to raise up the red flags. Either way, it’s impossible to ignore some of the moves that have already taken place in 2016.

What is truly amazing after the fact is that gold is doing what it is in 2016. At the end of 2015, the volatility and trends were not factored into stocks and bonds yet, along with some of the central bank trends. In fact, gold looked like it was ready to take a dive to well under $1,000, if you looked at the chart patterns going into 2015’s year end. Analysts were very negative on gold miners and producers at the end of 2015 as well. At roughly $1,300 per ounce in May of 2016, let’s just say that this was one of those instances when many of the fundamental investors and the chartists alike are scratching their heads.

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