Analysts bullish on Aussie gold stocks

Analysts from Morgan Stanley and Canaccord Genuity have upgraded price targets for most of the Australian gold producers...
22nd May 2020
Resources Rising Stars

Analysts from Morgan Stanley and Canaccord Genuity have upgraded price targets for most of the Australian gold producers under their coverage (reports MiningNews).

Gold futures rose as high as US$1760 an ounce this week, close to seven-year highs, and remain at about $1750/oz.

Morgan Stanley said the current price was above its June quarter bull case forecast of $1736/oz.

"US 10-year real rates have turned negative, and the yield curve has inverted - both strong bullish signals for gold leading to ETF holdings are at peak levels and futures positioning heavily long," analysts said.

"Our bull case forecast for December quarter is at $1900/oz and could be tested."

Canaccord has upgraded its 2025 forward-curve pricing assumptions for US dollar gold by 6.3% to $1824/oz, with nearer-term (2020-2023) prices increasing by an average of 5.8%.

The 2020 forecast was lifted by 3.8% to $1696/oz.

Assuming an Australian dollar exchange rate of 64c, Canaccord's long-term Australian gold price assumption is up 2% to A$2864/oz.

The bullish view of both banks has led to price target updates for many producers.

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