Gold Ready to Shine Again?

Bell Potter has updated its gold tracker, for a world where a peace deal between the US and Iran holds up. Which seems more and more uncertain as the two parties are yet to sign a solid deal.

Golden Tailwinds

Bell Potter notes that markets have already begun pricing in a cessation of hostilities. The broker expects the trend to remain towards a ceasfire. which should lead to a reversing of oil prices, and an increase in gold prices.

Bell's analyst anticipates lower inflation expectations to support bullion prices.

Gold had indeed pulled back on a strenghtening US dollar, as a spike in crude oil increased global demand for the greenback.

Bell adds that balance sheets, margins, and an exploration momentum among gold miners remain strong.

Another aspect fueling that optimism is Central Banks buying. The World Gold Council's annual survey of Central Banks purchasing intentions reinforced that gold remains a reserve asset in a fragile geopolitical environment.

Stock picks

In terms of stock-specific analysis, Bell's top picks in the space include Evolution Mining and Capricorn Metals.

Bell Potter says these are high-margin producers, with Evolution Mining described as offering leveraged exposure to both gold and copper. The broker also notes a strong balance sheet and consistent dividends over the past 13 years. Bell Potter rates the stock a 'BUY', with a $16.45 target price.

Meanwhile, Bell Potter also sees Capricorn Metals as a 'BUY', with a $16.25 target price. The broker is upbeat on production prospects at the Mt Gibson project in WA, anticipating outputs for the next 17 year.

Overall, Bell Potter says it is time to buy into selected gold stocks, supported by lower valuations, peace prospects, and central bank buying.