Fears surrounding the fast-spreading COVID-19 Delta variant and its potential impact on economic recovery have boosted the safe-haven appeal of gold. This, along with an increased interest in safe-haven metals amid geopolitical tensions caused by the collapse of the Afghan government, makes Wall Street analysts bullish about gold stocks Sibanye Stillwater (NYSE:SBSW), Kinross Gold (NYSE:KGC), and Eldorado Gold (NYSE:EGO).They are each currently trading significantly below their 52-week price highs. And analysts believe these stocks could rally by more than 45%. So, let’s discuss.As the resurgence of COVID-19 cases continues to heighten investors’ concerns that the unabated pandemic will threaten the global economic recovery, the spot gold price retreated slightly this week after hitting its highest level since August 6, 2021, at $1,795.25. But the safe-haven metal continues to hover near the two-week high, with investors awaiting the minutes of the Federal Reserve’s July policy meeting for cues on its tapering plans.
Although a stronger U.S. dollar, given the hawkish outlook for U.S. monetary policy, combined with an improvement in real yield could mean more downside for gold, Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA, believes “the elephant in the room is this Delta variant.” Therefore, “gold is likely to find more haven buying.” Moreover, the geopolitical tensions related to the collapse of the Afghan government could further boost the yellow metal’s safe-haven appeal.
Amid this environment, Wall Street analysts remain bullish about prominent gold mining stocks Sibanye Stillwater Limited (SBSW), Kinross Gold Corporation (KGC), and Eldorado Gold Corporation (EGO). These stocks are currently trading significantly below their 52-week highs. And given the expected increase in demand for safe-haven assets, analysts expect these stocks to rally by more than 45% in the near term.