Bank of America sees rate cuts propelling gold to $3,000, and this stock is a way to play it

Bank of America doesn’t see gold’s rally ending soon and thinks producer Gold Fields could benefit. Analyst Jason Fairclough reinstated the stock with a buy rating. His $16 price target implies nearly 13% upside over the next 12 months. A key asset for the metal producer is Chilean mine Salares Norte, which could increase growth through near-term gold production. While the Covid-19 pandemic and macroeconomic and weather-related challenges kicked the project off to a rough start, Fairclough expects operations at the mine to run much smoothly from here. “Salares Norte should be a highly cash generative asset and we think it could account for [about]. 22% of group production by FY26E,” Fairclough wrote. “We see the project as a core component of GFI’s strategy to focus on longer-life assets.” Fairclough’s reinstatement comes with gold on a record-setting tear. The precious metal hit an all-time high on Monday, trading above $2,600 per ounce. That puts its year-to-date gain north of 25%. BofA also thinks lower Federal Reserve rates can drive gold to $3,000 by 2025. A longer-term catalyst includes Gold Fields’ acquisition of Osisko Mining in August. Following this deal, Gold Fields is expected to become the 100% owner of the Windfall underground project in Quebec, which could produce nearly 300,000 ounces of gold per year, GFI YTD mountain GFI YTD chart The analyst also noted Gold Fields has a history of investing in modern ways to grow and preserve its reserves, making its processes more sustainable long term.