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Which Gold Stock Could Outshine in 2022? | The Mesh Report

Which Gold Stock Could Outshine in 2022?

The Gold Enthusiast May 3, 2022 Comments Off on Which Gold Stock Could Outshine in 2022?

During stock market turmoil, many investors look for safe-haven assets, like gold, to protect their wealth. Aside from investing in physical gold, investors can also gain exposure to gold through gold stocks and gold ETFs (Exchange Traded Funds).

According to the World Gold Council, gold demand grew 34% year-over-year in Q122 amid the Ukraine-Russia crisis and high inflation. Q122 demand was driven by strong gold ETF inflows, while bar and coin investments, as well as jewelry consumption declined.

Gold prices in the days ahead could be further impacted by rising U.S. interest rates and a strong dollar. Rising interest rates impact gold’s appeal as they increase the opportunity cost of holding non-interest-bearing assets, like gold.

Bearing these dynamics in mind, we used the TipRanks Stock Comparison tool to compare Barrick Gold, Newmont Mining, and Kinross Gold and discuss Wall Street’s views on these gold stocks.

Barrick Gold Corporation (NYSE:GOLD) (TSE:ABX)

Toronto-based Barrick is a leading gold and copper producer, with mines and projects in 18 countries across North and South America, Africa, Papua New Guinea, and Saudi Arabia.

According to a mid-April preliminary update, Barrick’s Q122 production declined 17.7% from Q421 to 990,000 ounces. Q122 production was hit by lower production at the Carlin and Cortez mines following the depletion of higher-grade underground ore stockpiles, planned maintenance at Kibali and Turquoise Ridge, and mine sequencing in Tongon.

Barrick’s had previously guided for its gold production to be the lowest in Q122 and increase through the year. It expects copper production to be higher in the second half of the year. The company stated that it is on track to achieve its full-year gold and copper guidance.

The company’s Q122 performance and the impact of higher costs will be clearer once the company announces its results on May 4.

Recently, Bernstein analyst Bob Brackett downgraded Barrick to a Hold from a Buy with a price target of CAD 27. The analyst noted that the 10-year TIPS (Treasury Inflation-Protected Securities) yield has shot up “radically towards positive and is likely to increase”, indicating that gold prices could fall and bring down gold stocks with it.

Meanwhile, Barclays analyst Matthew Murphy raised his price target on Barrick to $28 from $26 and maintained a Buy rating. Murphy noted, “While a global recession appears unlikely, there are multiple headwinds dragging on the growth outlook.”

Murphy believes that copper still appears to be headed towards a surplus, while the gold “geopolitical premium gets a boost.” Murphy remains upbeat on select miners, with a gold preference, like Barrick.

The other analysts on the Street are cautiously optimistic, with a Moderate Buy consensus rating based on 10 Buys and four Holds. The average Barrick Gold price target of $28.11 suggests 26% upside potential from current levels. The U.S. listed shares of Barrick have advanced over 17% this year.

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