Equity analysts at Eight Capital see the price of gold “exhibiting increased sensitivity to both geopolitical and systematic risks, including a higher gold-implied inflation rate.”
In a research report released Thursday, the Toronto-based firm hiked its 2023 gold price forecast to US$1,900 per ounce from US$1,800 previously and its 2024 projection to US$2,000 from US$1,900. It attributes the change to a higher risk premium in its model “driven by increased geopolitical uncertainty and a greater risk of systematic factors.”
With that change, analysts Ralph Profiti, Puneet Singh and Felix Shafigullin raised their target prices for shares of senior and intermediate gold equities by an average of 6 per cent and streaming and royalty equities by 12 per cent.
“Senior gold equities currently trade at a 7-per-cent premium to the intermediates vs. the historical average of 20 per cent, and at a 35-per-cent discount to streaming & royalty equities vs. the historical average discount of 24 per cent, representing compelling relative value,” the analyst said.
Their target changes are:
- Agnico Eagle Mines Ltd. ( “buy”) to $95 from $90. The average target on the Street is $80.95.
- Lundin Mining Corp. ( “neutral”) to $11.50 from $11. Average: $10.33.
The analyst said: “TOP SECTOR PICKS: AbraSilver Resource, Agnico Eagle Mines, Aya Gold & Silver, Cameco Corp, Foran Mining, Franco Nevada, Freeport McMoRan, GoGold Resources, Hudbay Minerals, K92 Mining, Lion One Metals, New Pacific Metals, NexGen Energy, Osisko Development, Osisko Gold Royalties, Rupert Resources, Solaris Resources, Teck Resources, Wheaton Precious Metals.”