After gold recently traded above $2,000 per ounce, the cheers from the gold bugs grew louder and louder. The problem is that interest rates started to rise and profit-takers were able to sell gold for above $2,050 for a very brief period. Now gold is back down at $1,950, and some naysayers already are saying that the gold bubble has popped.

Where gold trades for the rest of 2020 will depend on market forces and the economy more than it will from the sentiment of the day. Analysts at Credit Suisse still see lots of upside in gold and the key gold-mining stocks. The firm even has referred to the recent sell-off as a “transient pullback.”

With all-time nominal highs above $2,050, the prior high, in September 2011, was close to $1,900 per ounce. Adjusting for inflation, the old all-time highs, from way back in January of 1980, would be closer to $2,800.

Credit Suisse has raised its 2021 gold price forecast to $2,500 per ounce from a prior formal target of $1,800. The firm’s 2022 target was raised to $2,200 from $1,650. For the rest of 2020, Credit Suisse sees gold averaging roughly $2,000.

As for a risk to the upside view, a better than expected U.S. economic recovery and the Federal Reserve becoming more hawkish on its interest rates outlook would hamper the upside.

The bullish medium-term outlook is supported by an ideal set of macroeconomic factors. This is made up of incredibly low Treasury yields, U.S. dollar weakness and the widespread expectation of inflation following unprecedented monetary and fiscal policy. Credit Suisse also sees investment demand offsetting both jewelry weakness and what looks to be slowing demand from central banks. As for the themes around earnings season from the gold companies, Credit Suisse has noted a continued discipline from North American gold companies targeting free cash flow generation, as well as deleveraging their books while returning capital by issuing higher dividends.

Most of the firm’s gold companies are also using ranges of $1,200 to $1,300 for planning and evaluating projects, although, until recently, many of the gold giants were using $1,100 as their planning targets. Credit Suisse’s Fahad Tariq made multiple price target upgrades on Friday.

Agnico Eagle Mines Ltd. (NYSE: AEM) was rated as Outperform, and Credit Suisse raised its target to $90 from $73. The firm sees 2020 earnings per share (EPS) rising to $2.01 from a prior $1.17, based on higher prices. The firm’s “blue sky scenario” was moved from $78 to $105 and the “grey sky scenario” from $50 to $65. Agnico Eagle Mines stock closed previously at $79.04, with a 52-week range of $31.00 to $84.66. The consensus price target is $82.09.

Barrick Gold Corp. (NYSE: GOLD) was reiterated as Outperform and its price target was raised to $33 from $30 on Friday. The better case went to $38 from $34 and the worse case remains at $20. The firm also raised its EPS target to $0.99 from $0.71 for 2020. Barrick Gold stock closed at $27.14, in a 52-week range of $12.65 to $30.69. The consensus price target is $32.38.

Newmont Corp. (NYSE: NEM) was reiterated as Outperform and its price target was raised to $82 from $72, while the 2020 targets were raised to $2.49 EPS from $1.70. Newmont’s blue sky case was raised to $90 from $76 and its grey sky case to $54 from $49. Newmont stock closed at $63.95. The 52-week range is $33.00 to $72.22, and the consensus price target is $77.35.

Yamana Gold Inc. (NYSE: AUY) was reiterated as Outperform and its price target was raised to $7.25 from $6.50. The firm’s 2020 estimate was raised to $0.37 EPS from $0.18, while the blue sky scenario went up to $8.00 from $7.50, and the grey sky scenario rose to $5.00 from $4.00. Yamana Gold stock closed at $5.98, in a 52-week range of $2.23 to $7.02. The consensus analyst target is $3.86.

While this gold sector call sounds as if it is all bullish, there is some balance here. The analyst has maintained a Neutral rating on Alamos Gold, Centerra Gold, Franco Nevada, Iamgold, Kirkland Lake, Kinross, New Gold and Wheaton. He also has an Underperform rating on Eldorado Gold. Endeavor (traded in Toronto) was maintained as Outperform.

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