The market is waiting for a gold rally

Published on Tuesday, September 1, strong us industrial statistics supported the dollar, which interrupted the gold rally, according to trading data. As of 9 a.m., the price of December gold futures on the new York Comex exchange was down 0.41 percent to $ 1970.7 per Troy ounce. “A strong dollar is holding back the price of the precious metal,” Reuters quoted DailyFx strategist Margaret young as saying. But, in his own words, “the broader picture remains favorable for gold.”

Over the past months, gold has rewritten the record high of 2011 several times. In may and June, the metal was trading in a range of about $ 1,700 per ounce, in early July, gold futures broke through the $ 1,800 mark, and in late July — $ 1,900 per ounce. The maximum price on the spot market reached on August 5, at 2037.05 dollars per ounce. In the course of trading, the price rose to a record $ 2,039. 93 per ounce.

After that, investment companies began to raise their forecasts not only for the precious metal, but also in the assessment of gold mining companies in Russia. “In the face of rising gold prices, our favorite in the sector is Petropavlovsk,” said the July review of the investment company Renaissance Capital with a recommendation to “buy”. At the end of August, VTB Capital analysts revised the forecast gold prices and raised the fair price for Petropavlovsk shares to 61 British pence (today it is about 60 rubles), also with a “buy”recommendation. “Gold will rise to $ 3,000 an ounce in 2022,” their report said.

Petropavlovsk is the fifth largest gold mining company in Russia. Its mining assets are concentrated in the Amur region, and its parent company is registered in London. In 2019, it produced 517.3 thousand ounces of gold, which is 22 percent more than in 2018. Revenue for the previous year increased by 48 percent to $ 741.6 million, and EBITDA increased by 45 percent to $ 264.8 million. In the first half of 2020, Petropavlovsk increased gold production by 42 percent year-on-year, to 320.6 thousand ounces. Petropavlovsk PLC shares have been traded on the Moscow exchange since June 25, 2020. Before that, since 2007, they were only traded on the LSE, where the initial listing took place.

“Petropavlovsk shares have been showing intensive growth for several months, being the driver of the growth of the Moscow Exchange index and outperforming it by 3-4 percent,” says Artem Deev, head of the analytical Department at Amarkets. — Positive indicators of the company are based on two key factors: they are positively affected by the growth of gold prices and increased investor interest in this asset. The success of the company is directly correlated with the arrival of a new top management and personnel changes. The new effective management team was able to improve the situation in Petropavlovsk even in such a short period of time.”

Sergey Suverov, investment strategist at Aricapital, agrees with Deev: “The results are quite good, since the arrival of the new management quotes have increased by about 20 percent. An impressive start, although the future depends on the resolution of the corporate conflict. But in General, the company’s potential is very large, given that gold prices are at historical highs, and the company is one of the leaders in Russian gold mining. Petropavlovsk is one of the most interesting securities in the second tier.”

Against the background of positive forecasts of international and Russian agencies regarding the value of gold, the attractiveness of the asset in the market remains high. After a slight drawdown at the end of August to 1929.3 dollars per ounce, in the first week of September, the price of the precious metal again exceeds 1975 dollars.