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Newmont (NYSE: No) was upgraded to sector outperform from sector perform with a $59 price target, but AngloGold Ashanti (AU) was downgraded to sector underperform from sector perform with a $30 price target, at Scotiabank, which still sees the group delivering an average upside of around 20% for the Share price targets with gold price forecast raised to $2,300/oz in 2024-25 from $2,200 previously.
Scotiabank analysts led by Tanya Jakoskunnik expect Newmont (NEM) to show operational improvement and hence margin expansion in the second half of 2024, while they have cut their forecasts for AngloGold (AU) due to a strong share price rally, up more than 70% year to date.
The central bank’s optimism about gold reflects its outlook for interest rates, inflation and the dollar, while including stronger-than-expected purchases of gold from the official sector, where gold now accounts for 16% of foreign exchange reserves.
Scotiabank’s top picks for gold and precious metals names include Newmont (NEM), Agnico Eagle Mines (AEM), Kinross Gold (KGC) and Barrick Gold (GOLD); while the bank prefers operators, its top cash flow operators are Wheaton Precious Metals (WPM) and Triple Flag Precious Metals (TFPM).