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Newmont (NYSE:NEM) +3.5% in Wednesday’s trading in a strong session for precious metals miners, as CIBC upgrades shares to Outperform from Neutral with a $61 price target, raised from $46.
CIBC raises its gold price forecast to $2,290/oz in 2024 and $2,600 in 2025, and says its upgrade of Newmont (NEM) reflects the company’s status as the S&P 500’s only listed gold producer.
Given the U.S. macroeconomic outlook, CIBC sees more U.S. investors becoming interested in gold and gravitating to Newmont (NEM) as the largest producer in the space.
Following President Biden’s recent debate performance, “the specter (and spectacle) of a second Trump presidency looms on the horizon and could cause a parabolic shift in the gold price in 2025,” CIBC says.
With rate cuts still looming, and the possibility of a very dovish U.S. president who may test the independence of the Fed, CIBC sees rates falling while inflation remains persistent, fueled by fiscal stimulus and softer rates, which “bodes well for gold,” adding it expects gold ETFs will pick up the pace in late 2024 and into 2025 as rate cuts become a reality.
CIBC says its top picks among precious metals equities are Agnico Eagle Mines (AEM), Kinross Gold (KGC), Pan American Silver (PAAS) and Wheaton Precious Metals (WPM).