Analysts Believe 2024 Marked a Turning Point for the Gold Miners

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Published on: Jan 14, 2025
Author: Caroline Kong

As lowered expectation of Fed’s 2025 rate cuts boosting the US dollar and rising Treasury yields, the price of gold is confined below $2,700 per ounce. However, analysts remain bullish on the gold price hitting record highs in the second half of the year, given the uncertainty surrounding the U.S. economic and inflation outlook.

Investors widely expect that Trump’s committed tax cuts and plans to boost domestic manufacturing through tariffs will further push up already resurgent inflation. If the trade war leads to a slowdown in economic growth and weakens the labour market, there will be a great deal of uncertainty about the U.S. economy, even the possibility of falling into a recession.

For now, Wall Street investment banks, including Goldman Sachs, still believe that the price of gold could rise to $3,000 in 2025.

Gabelli Gold Fund (GOLDX) portfolio manager Chris Mancini recently shared his bullishness on the price of gold in 2025 in an interview with Kitco News. He also said investors should focus more on mining stocks. Despite gold’s historic gains, mining stocks have lagged far behind.

He noted that investors are hesitant to buy gold stocks because the sector has a poor history of managing investment capital. However, 2024 marked a turning point in the market. With mining companies enforcing strict capital management discipline, funds are expected to flow back into the sector.

According to Mancini, fundamentally, companies in the gold mining space are financially sound and costs are under control. In this environment, gold miners should do well. If the gold price rises to $3,000, investors will find it impossible to ignore the sector. Even if the gold price stays in its current range, miners will continue to maintain solid margins and cash flow.

Mancini suggests focusing on productive assets, which will benefit directly from higher gold prices. Smaller producers with high-quality single mines could become attractive acquisition targets as larger gold producers look to increase production, he added.

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