Gold Stocks Seen Undervalued as Citi Predicts $5,000 Price by Late 2027

Citi's analysts are optimistic about large-cap gold equities, citing Newmont and Agnico Eagle Mines as top picks. They project gold prices to reach $5,000 per ounce by late 2027, which would make current spot levels undervalued.

The bank notes that the valuation gap creates an opportunity for gold stocks to outperform during periods of stable prices. Large-cap gold miners are demonstrating strong free cash flow yields at current spot prices, with cost inflation remaining under control.

Citi also highlights the sensible capital allocation among large-cap gold companies, which balances reinvestment in operations with shareholder returns. Returning capital to shareholders is critical, as dividend yields differentiate mining stocks from holding and provide downside protection if gold prices decline.