Global gold producers’ sector credit remains stable — report

Global gold producers’ 2023 sector credit outlook is stable, supported by healthy balance sheets and deleveraging capacity, according to a new report by Fitch Ratings.

Gold producer financial metrics remain strong for respective ratings partially driven by a period of high gold prices beginning in 2020, which drove higher shareholder returns and investment as well as stronger financial flexibility, the firm said.

Gold prices have been resilient despite raising real interest rates beginning in 2022, supported, in part, by geopolitical factors and flight-to-quality investment demand, it added.

Looking ahead, Fitch sees gold prices moderating but remaining elevated in 2024 and 2025 relative to our midcycle assumption of $1,500/ounce. Margins will be pressured given elevated costs despite cost cutting/productivity programs but should be relatively strong for respective ratings.

The full report “Global Gold Mining — Relative Credit Analysis” is available here.