Gold has started 2016 strongly on safe-haven status
Gold was fairly stable after the Fed raised rates at the December FOMC
meeting, but has outperformed other commodities this year on demand for
safe-haven assets amid market volatility. Our macro team is positive on US
growth: hence we expect gold to moderate to US$1,000/oz by end-2016.
Upgrading ANG (FCF/catalysts) to Buy; ACAA (underperformance)
and GFI (significant FX tailwinds) to Neutral; Poly down to Neutral
We upgrade ANG to Buy from Neutral on strong FCF and scope for valueaccretive
corporate action (dividend reinstatement and/or a potential split).
Acacia is upgraded to Neutral from Sell following underperformance (Buly
performance slippage). With CEO Brad Gordon taking over operations, we
believe operations could surprise to the upside (potentially visible in the
next results). We upgrade Gold Fields (a key FX beneficiary) to Neutral
from Sell and downgrade Polymetal to Neutral (from Buy) given recent
outperformance and a fair valuation.