EMEA Gold Miners_Metals Weekly_ Who is going to buy gold in 2025_ Stay OW Hochschild, AngloGold, & Fresnillo

Summary of EMEA Gold Miners Conference Call Industry Overview - Focus on the gold mining industry in the EMEA region, particularly the outlook for gold prices in 2025 [1] - J.P. Morgan's Commodities Research maintains a bullish outlook for gold prices due to macroeconomic factors such as increased tariffs, trade tensions, inflation, and a growing US budget deficit [1][9] Key Insights - Gold prices have rallied approximately 30% in 2024, and the expectation is for prices to reach $3,000 per ounce by early 2026 [1][10] - Central bank purchases, especially from China, and strong retail demand in China are anticipated to support gold demand and prices in the near term [1][10] - The People's Bank of China (PBoC) resumed gold purchases in November 2024 after a pause since April, indicating renewed interest in gold as a reserve asset [1][10][17] Demand Drivers - A 1% increase in China's reported gold holdings could equate to approximately 400 tonnes of gold buying [1][28] - Historical data shows that sharp devaluations of the Chinese Yuan (CNY) have coincided with increased gold import demand, suggesting that retail investors may view gold as a safe haven amid economic uncertainties [1][19] - Chinese retail gold demand is influenced by various factors, including price momentum, GDP growth, interest rates, and property market conditions [1][18] Central Bank Activity - Central banks globally hold about 18% of their official reserves in gold, up from 15% at the end of 2023, reflecting a structural shift towards gold diversification [1][18] - Central bank net gold purchases in 2024 have amounted to around 694 tonnes, a 17% year-over-year decline but consistent with 2022 levels [1][17] Company Preferences - J.P. Morgan continues to favor EMEA gold miners such as Hochschild, AngloGold, and Fresnillo, all rated as Overweight (OW) [1][3] - Hochschild is on Positive Catalyst Watch due to expectations of successful ramp-up at the Mara Rosa project and potential dividend resumption [1][10] Market Sentiment - There is some skepticism among clients regarding the bullish forecast for gold, primarily due to uncertainty about future buyers at current price levels [1][9][15] - The report suggests that if the macro environment becomes more benign, there could be significant inflows into gold ETFs, as the attractiveness of money market funds diminishes [1][16] Conclusion - The outlook for gold in 2025 remains positive, driven by central bank purchases and robust demand from China, despite some market skepticism regarding price sustainability [1][9][10]