Gold share price targets and broker ratings
In this article we take a look at recent moves in the gold price, as well as broker ratings and price targets for locally listed counters AngloGold, Goldfields, Harmony, DRD Gold and Pan African Resources.
Spot gold
While gold has started to rally into the latter part of October 2021, the precious yellow metal has had a relatively soft year, missing out on the reflation trade opportunity, as it balances the prospect of tighter monetary policy in the world’s largest economy (the US).
The medium to long term trend for gold remains sideways in nature, with a broad range considered between levels 1680 (support) and 1960 (resistance) respectively.
We are seeing a shorter term bullish momentum pushing the price above the 1800 level to target the next level of resistance at 1840. It is above this level that the price will need to close to unlock the prospect of more substantial gains towards the 1910 and 1960 levels respectively.
Gold share price targets and broker ratings
The below table shows locally listed gold counters, highlighting long term price targets and broker ratings as of the 25th of October 2021 and sourced from Refinitiv Workspace.
| Company | LT Broker Rating | No. of Brokers | LT Target Price | Share Price | Discount/Premium to Target |
|---|---|---|---|---|---|
AngloGold |
HOLD |
11 |
338.15 |
292 |
- 13.51% |
Gold Fields |
BUY |
9 |
165.22 |
145 |
- 12.17% |
Harmony |
HOLD |
8 |
58.86 |
59 |
- 0.42% |
DRD Gold |
HOLD |
1 |
15.50 |
14 |
- 11.94% |
Pan African Resources |
BUY |
3 |
28.67 |
17.38 |
- 39.97% |
The consensus ratings on GoldFields and Pan African Resources are currently ‘buy’, while AngloGold, Harmony and DRD currently carry long term average ratings of ‘hold’.
All of the gold counters listed above currently trade at discounts to a median of long term price targets, with the suggestion that Pan African Resources trades at the deepest discount, followed by AngloGold and Goldfields respectively.
It should be noted that smaller gold producers DRD Gold (market cap of around R12bn) and Pan African Resources (market cap of around R6bn) are smaller to mid-tier gold producers (on a relative basis) and in turn receive less analyst coverage as noted by the lower number of broker ratings.
In summary:
- The price of dollar denominated gold has started a short term rally although remains rangebound over the medium to long term
- The precious metal has failed to benefit from reflation trade assumptions due to the prospect of tighter monetary policy amidst a global economic recovery
- Goldfields and Pan African Resources have consensus long term buy ratings
- AngloGold Ashanti, Harmony Gold and DRD Gold have consensus long term hold ratings
- All the locally listed gold shares covered here trade at discounts to a median of long term boker price targets
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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