Rising inflation is motivating investors to buy gold as a hedge. Gold prices have rallied recently, hitting a five-month high. Furthermore, because the Fed may not raise interest rates anytime soon, gold prices should move higher. Therefore, Wall Street analysts expect gold mining stocks Agnico (AEM), Kinross (KGC), B2Gold (NYSE:BTG), and Yamana (AUY) to rally 18% or more in price. Read on.The U.S. Labor Department has reported rising inflation, with a 6.2% annual increase in the Consumer Price Index (CPI) in October, its highest year-over-year increase since November 1990. The high inflation is eroding wage gains, and holding cash seems costly now. According to Ray Dalio, the founder of investment management firm Bridgewater Associates, there are better assets to hold than cash.
As a good inflation hedge, gold has attracted investors, hitting five-month highs lately. Spot gold has rallied 0.6% to$1,861.39 per ounce. Furthermore, with the central bank viewing current inflation as transitory, and exhibiting no inclination to raise benchmark interest rates anytime soon, analysts expect gold to hit $1,900 per ounce soon.
Given this backdrop, Wall Street analysts predict gold mining stocks Agnico Eagle Mines Limited (NYSE:AEM), Kinross Gold Corporation (NYSE:KGC), B2Gold Corp. (BTG), and Yamana Gold Inc. (NYSE:AUY) will rally 18% or more in the near term.