Gold Miners Poised to Embrace Yet Another Extraordinary Year

SEATTLE (Scrap Monster):  The gold miners are likely to witness another extraordinary year in 2021, said analysts.

According to Scotiabank analysis, gold miners reported expansion of margins and record level of free cash flows in 2019, mainly driven by the rally in gold prices during the year. The outbreak of Covid-19 pandemic boosted the demand for safe-haven assets, thus driving gold prices to record high level. Many of the miners reported healthy balance sheets. Among miners, Kinross Gold Corp. offers particularly compelling value, it said.

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Credit Suisse analysts do not find any major changes to factors supporting gold move any time soon. The prices are likely to average at $2,100 per Oz during the next year. Although spot gold prices have receded from the all-time highs recorded in August, the prices are still higher by around 24% when matched with the beginning of the year. Incidentally, the NYSE Arca Gold Miners Index has surged higher by 23% during the current year.

The mining companies that are likely to deliver best returns include Newmont, Barrick Gold, Agnico Eagle Mines, Yamana Gold and Endeavour Mining, said Credit Suisse analyst Fahad Tariq.

Delbrook Capital too expects a big rebound in precious metal prices, as interest rates continue to remain lower.