CA - Perseus Mining: Solid Upside Potential But At A Lower Price

2024-03-14 14:09:21 ET

Summary

• Perseus Mining Limited receives a Buy rating, but retail investors should wait for the share price to make a significant bottom as gold price momentum cools.
• The stock is expected to pull back from current levels due to its positive correlation with the spot gold price.
• Perseus Mining shares are well-positioned to benefit greatly from robust gold prices amid investors' portfolio hedging strategies to offset headwinds from the expected 2024 recession.
• Perseus Mining is a low-cost, medium-sized gold producer in West Africa and consistently delivers in line with production forecasts. A strong financial position supports growth projects.

A “Buy” rating for Perseus Mining Limited

The stock of Perseus Mining Limited ( OTCPK:PMNXF ) ( PRU:CA ) – an Australian operator of low-cost, mid-scale gold production from West Africa – receives another Buy rating from this analysis. However, retail investors should wait a bit before buying Perseus Mining as this analysis sees the possibility of a decline in the stock following an expected weakening in gold's price momentum -- up eight sessions in a row and the best weekly gain since October 2023 last week -- largely due to the following factors:

a) Stretched daily RSI conditions for gold prices.

b) The idea that the Federal Reserve may delay the unwinding of its tightening policy on the more-than-expected 275,000 jobs the US economy added in February. Higher interest rates hurt gold, which instead offers no return....

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