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USB Global Research 20 Nov 2024
Australian Gold
Gold to set new highs in 2025

Remain positive both gold and gold equities
Gold equities are down ~10% in the past month with gold down ~5% on delayed rate
cut expectations and USD strength following the US election outcome. Despite these
short-term challenges our Strategy Team remains bullish on the gold outlook seeing
room for further strategic allocations and expecting the yellow metal to make new highs
through 2025. The US Red Sweep, strong diversification buying interest and elevated
global uncertainty to continue to support prices higher. We update our price forecast
over 2025-28 -3%/+3%/+4%/+4% to US$2,800/2,850/2,700/2,400oz and our longterm
US$1,950/oz remains unchanged. This sees our FY25E EPS trimmed but FY26/27E 5-10%
higher and NPV based price targets up to 4% higher. Our preferred picks in the ASX gold
space are NST, PRU, GOR, GMD and DEG.

Continuing to make higher highs and higher lows
Looking past the short-term headwinds from a stronger US$ and market concerns about
the potential for higher rates amid more US fiscal stimulus, we see a period of
consolidation before gold continues to make higher highs and forecast US$2,900 by
end of 2025 and US$2,950/oz by end of 2026. We expect this should be driven by
continued strategic gold allocations and official sector purchases in a backdrop of high
macro volatility and persistent geopolitical risks.

Time for gold miners to shine
The key catalyst for miners to outperform, in our view, remains the delivery on guidance
(production) and subsequent generation of free cashflow. The combination of already
strong balance sheets and strong cash generation should drive further cash returns
(dividends and buy-backs). However, the wasting asset base and declining Reserve and
Resource inventories that the sector is known for will likely see continued M&A activity.
Considering these factors we continue to see value across the ASX gold sector.

Equities: Prefer NST of majors and a basket of PRU, GOR, GMD and DEG
We forecast gold higher at US$2,900/oz by Dec-25 with a long-term real US$1,950/oz
price from 2031.