dollar and eventual inflationary pressures. Federal Reserve, low bond yields, potential for a weaker U.S. NAV estimates can vary due to the assumptions used, such as gold price, mine life, capital expenditures and more, so Credit Suisse said it went with “historical consensus” NAV in its research.Ĭredit Suisse said “there is a runway for gold to reach all-time highs” due to the “unprecedented” macroeconomic backdrop, which includes accommodative monetary policy with unlimited quantitative easing from the U.S. The bank said it studied P/NAV since it is considered the standard valuation multiple for the gold sector. Average P/NAV for senior gold producers, who exceed 1 million ounces a year, is currently around 2.11, compared to 2.31 during the previous peak, Credit Suisse reported. Average P/NAV for intermediate gold producers, with annual gold production below 1 million ounces, is currently around 1.19 times, compared to around 2.34 during the previous peak. “This trend is more pronounced for mid-cap/intermediate gold stocks, as large-cap/senior gold stocks have re-rated more quickly with generalist inflow,” the bank said.įor companies that Credit Suisse covers in North America, the average P/NAV is currently around 1.80 times, compared to around 2.25 during the previous peak. Valuation multiples are still below where they were in the last bull cycle for the gold market, Credit Suisse said. Credit Suisse sees more room for upside in gold-mining stocks based on the ratio of stock prices to net asset value (P/NAV), as well as an expectation that gold prices will rise some more.
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