Credit Suisse Expects Gold Miners to Follow Gold Higher

Credit Suisse (CS) is positive about gold prices (IAU) in 2019. The bank expects gold prices to average $1,280 per ounce in 2019 and $1,300 in 2020. Credit Suisse sees a number of macro factors supporting gold prices in 2019. These issues include ongoing geopolitical issues like the US-China trade war and Brexit. The bank is also concerned about slowing global growth and recession fears.

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The Fed’s dovish stance is among the factors encouraging Credit Suisse to be positive on gold. The dovish Fed is expected to weigh negatively on the US dollar (UUP) (USDU).

Credit Suisse thinks that the above-mentioned factors could propel gold prices (GLD) above the average it forecasted for 2019.

Credit Suisse thinks that higher gold prices could increase gold miners’ margins. Credit Suisse expects gold equities (GDX) (GDXJ) to follow gold higher. The banks think that after the sell-off in 2018, gold equities present an attractive entry point, particularly for equities with favorable valuations.

In a recent note, Credit Suisse focused on five companies:

• Endeavour Mining—outperform
• Alamos Gold (AGI)—outperform
• Centerra Gold—neutral
• Eldorado Gold (EGO)—neutral
• New Gold (NGD)—neutral