Metal Price Support Remains Despite Inflation Fears
Despite persistent inflation and recent interest rate hikes, analysts at National Bank Financial believe there's still a 'supportive' backdrop for metal prices. They point to strong Central Bank buying, physical demand from China and India, continued devaluation of the USD given elevated debt levels, and heightened geopolitical uncertainty.
The analysts upgraded their price deck for all metals and foreign exchange rates, incorporating average prices in the third quarter as well as revisiting forward-looking estimates. Their 2027-2028 gold price assumptions now sit at US$4,700 per ounce, up from US$4,500, while silver assumptions remain unchanged at US$70 per ounce.
The analysts also updated their long-term prices, accounting for inflationary pressures on costs in the sector and anticipation of additional cost escalation as mining companies optimize mine planning under an elevated commodity price environment. Their long-term gold price assumption now stands at US$3,400/oz, up from US$3,200/oz, while the long-term silver price is US$45.00/oz, up from US$42.00/oz.
The analysts highlighted a few key stocks in their coverage universe, including Alamos Gold Inc., Elemental Royalty Corp., Endeavour Silver Corp., and IAMGOLD Corp., which they upgraded to 'outperform' with new price targets.