Gold is currently under pressure with rising certainty surrounding the world’s recovery from the pandemic, increasing bond yields, and a strengthening U.S. dollar. However, analysts believe that an increasing threat of inflation will continue to support the bullion market. Also, the resurgence of COVID-19 cases in several parts of the world could increase the demand for the metal as a safe-haven asset. Therefore, Wall Street analysts expect gold mining companies Kinross Gold (NYSE:KGC), B2Gold (NYSE:BTG), and Yamana Gold (NYSE:AUY) to rally more than 30% from their current price levels. Let’s discuss.Strong U.S. economic data and a consequent rise in bond yields have been driving selling pressure on gold. A sharp increase in new home sales in the United States, record high output at manufacturing and services sectors, a decline in unemployment, and strong consumer spending signal a rapid economic recovery. As a result, the non-interest-bearing yellow metal is losing its appeal as a safe-haven asset. A strengthening U.S. dollar is another major factor that is reducing the metal’s attractiveness.
However, experts say renewed import demand from India and China could offer some support to gold in the near future. Furthermore, gold prices are likely to strengthen going forward due to global inflationary pressure. Analysts believe that gold prices have yet to factor in an increase in inflation.
Given this backdrop, Wall Street analysts expect gold mining stocks, Kinross Gold Corporation (KGC), and B2Gold Corp (BTG), and Yamana Gold Inc. (AUY) to advance more than 30% over the next 12 months.