Gold Could Hit $4,000 - JPMorgan Sees This Miner Rallying 60-70%

Core Viewpoint - JPMorgan is shifting its focus to AngloGold Ashanti PLC as its top pick in the gold mining sector, replacing Fresnillo Plc, which has seen significant gains this year [1][6]. Gold Market Outlook - JPMorgan's commodities team forecasts gold prices to reach $4,000 per ounce by mid-2026, driven by strong demand from central banks and investors, with net buying averaging 710 tons per quarter [2][3]. - Geopolitical and policy uncertainties are expected to sustain the bullish trend in gold demand [2]. AngloGold Ashanti's Performance - AngloGold has shown impressive momentum, with a 97% increase year-to-date, and is projected to generate $575 million in free cash flow for the second quarter [3][4]. - The company may offer a 6% dividend yield if management increases payouts in response to rising gold prices [3]. Capital Expenditure and Growth Initiatives - High capital expenditures are attributed to growth initiatives, including the Obuasi ramp-up and a scoping study at North Bullfrog, which are anticipated to be highlighted in the upcoming half-year results [4]. Financial Health and Valuation Potential - AngloGold's low leverage profile and strong cash generation position it well for further re-rating, with an estimated 60-70% upside to fair value if gold prices exceed $4,000 per ounce [5]. Competitive Landscape - While Fresnillo has also performed well with a 158% increase year-to-date, its valuation may limit further upside potential [6]. - Other competitors like Hochschild Mining and Gold Fields have also seen gains, but the current focus remains on AngloGold as it is perceived to be ahead in capitalizing on the gold market [6].