Gold equities have been on a fantastic run so far in 2016 amid the rally in prices. Analysts at BMO Capital Markets think the time has come to take some profits off the table, as the second quarter is a seasonally weak period for gold.

“We expect precious metals equities to outperform over the next 12 months, but anticipate a near-term correction perhaps providing better opportunities to buy over the next three months,” they said in a note.

Back when gold prices were slumping, the BMO analysts urged investors to focus on large producers that have high-quality assets, strong balance sheets and good management teams. These are considered the most “defensive” names in the sector. Now that prices are much stronger, they think investors should consider some higher-risk stocks that offer better upside.

“These less defensive names tend to be smaller producers that often have superior growth profiles to the larger producers, which lead these companies to deliver better leverage to higher metals prices,” they said.

Their top picks among the mid-tier producers are Alamos Gold Inc. and Endeavour Mining Corp.

The analysts raised their gold price assumptions do to ongoing economic uncertainty. They hiked their target for 2016 by 12 per cent (to US$1,175 an ounce), and raised their 2017 target by nine per cent (to US$1,200). Additionally, they predicted gold will bottom at US$1,150 an ounce, up from their prior forecast of US$1,000.