Newmont upgraded, AngloGold downgraded at Scotiabank in upbeat gold outlook

Newmont (NYSE:NEM) is upgraded to Sector Outperform from Sector Perform with a $59 price target, but AngloGold Ashanti (AU) is downgraded to Sector Underperform from Sector Perform with a $30 PT, at Scotiabank, which still sees the group averaging ~20% upside for stock price targets as it raises its 2024-25 gold price forecast to $2,300/oz from $2,200 previously.

Scotiabank analysts led by Tanya Jakusconek expect Newmont (NEM) will show operational improvement and thus margin expansion in H2 2024, while lowering the outlook for AngloGold (AU) due to strong stock price appreciation, up more than 70% YTD.

The bank’s optimism for gold reflects its forecasts for interest rates, inflation and the dollar while incorporating stronger than expected buying gold buying from the official sector with gold now representing 16% of foreign exchange reserve holdings.

Scotiabank’s top picks among gold and precious metals names are Newmont (NEM), Agnico Eagle Mines (AEM), Kinross Gold (KGC) and Barrick Gold (GOLD); while preferring operators, the bank’s top rated streamers are Wheaton Precious Metals (WPM) and Triple Flag Precious Metals (TFPM).