The leading investment bank said after Canada cut its official overnight rate by 0.25% to 4.75% that gold was on track to rise by more than US$400 an ounce to US$2800, up 18% on the latest price of US$2370/oz.

The Australian gold price, according to UBS is on track to rise above A$4000/oz over the next two years, delivering a substantial earnings boost for Australian gold miners.

“The gold sector offers value, is getting cheaper and there’s merger and acquisition (M&A) activity underway,” UBS said.

Investment advice upgrades to buy were handed out by UBS to Genesis, Northern Star, Regis and SSR while buy advice continues to apply to Bellevue, De Grey, Evolution and Gold Road.

“A structural shift in the gold price is underway,” UBS said. “Our gold price forecasts are 27% to 33% above consensus over 2025-to-2027.”

The enthusiasm for gold from UBS, and the Canadian interest rate cut, was followed by market speculation that the keenly-awaited global fall in rates might finally have started.

The Bank of Canada governor, Tiff Macklem, said he was confident that inflation in Canada was returning to the target rate of 2%.

All eyes are now on whether other countries follow Canada, particularly the U.S., which has been edging towards rate cuts since the start of the year.

Australia, burdened by rising inflation, could be the last cab off the rates rank.

Locally, revitalised interest in gold produced a 2% increase in the ASX gold index yesterday, which was slightly better than a 1.7% increase in the all-ordinaries for the past five trading days.

Fund raising by gold miners is getting easier as investors regain confidence in the metal. Ausgold reeled in $38 million to take its Katanning project in the south of WA through to a final investment decision and Black Cat Syndicate received firm commitments for $36 million to fund a restart of the Paulsens mine in the north of the State.

Gold was not the only commodity to get a positive report from a bank this week with Citi aligning itself with the case for a much higher uranium price, perhaps eclipsing the all-time high of US$146 a pound.

“Accelerating U.S. power demand and evolving U.S. nuclear policy and market trends have heightened the focus on 95 operational U.S. reactors which supply 20% of U.S. power,” Citi said.

“We project global uranium prices will average US$99/lb in 2024 and US$110/lb in 2025”, Citi said, later adding in the body of a 30-page uranium sector report that the nuclear fuel should rise to US$115/lb over the next three years “potentially breaching the 2007 high of US$146/lb”.

Bell Potter, a local stockbroking firm, got into the uranium act with a detailed report on ASX-listed uranium stocks active in Namibia.

In a report headed “Namibian road trip notes” Bell Potter listed Deep Yellow as a speculative buy with a price target of $1.90, up 38c on yesterday’s price of $1.52 with Paladin a hold at $15.70, up 20c on the latest price of $15.50.

Morgan Stanley is a bigger fan of Paladin, updating its research on the stock to assign it a buy tip and price target of $17.45, close to $2 higher than its last sale.

Copper stabilised this week after a hefty fall which signalled the end of a shorts squeeze on commodity markets with the price creeping back up to US$4.64/lb, US12c higher than the low point of US$4.53/lb reached on Wednesday.

The price recovery was not enough the save local leaders such as Sandfire from slipping lower, down 38c to $9 even as low-profile but well-connected boutique bank Moelis Australia put a price target of $9.25 on the stock.

Moelis also had buy recommendations on five explorer/developers. Rex, with its promising Hillside project in South Australia, is forecast to rise from its latest price of 28c to 50c. AIC should move up from 52c to 70c. Firefly is expected to gain 26c as it heads for a price of $1. Metals Acquisition has a price target of $27 (versus last sales at $20.82) and Capstone Copper is tipped to rise from $10.97 to $14.50.

New World Resources, which is exploring the Antler project in Arizona, caught the attention of Wilsons Advisory which has an overweight recommendation on the stock and a price target of 6c, well ahead of last sales at 3.6c.

China’s appetite for commodities which, in turn, drives Australian mining company share prices, was tested last week by UBS during a road trip to China’s major manufacturing centres.

The two-word assessment from visiting Chengdu, Beijing, Shanghai and Jiangxi was that China’s manufacturing sectors were “incrementally positive”.

“A clear pathway to stabilisation in property markets is emerging,” the bank said. “Steel demand remains challenged but exports are seen as resilient despite trade challenges. Copper and aluminium demand is robust”.

Electric vehicle demand in China is positive for lithium but “accelerated demand in the rest of the world is needed to bring tension back into lithium markets,” UBS said.

The price outlook for lithium was said to be bearish with spodumene range-bound, trading between US$1000-and-US$1200 a tonne, leading to sell ratings on Pilbara Minerals, Independent Group and Mineral Resources, a neutral view on Liontown, and a buy on Patriot, which is forecast to rise from 73c to $1.30.

Vulcan Energy was the big lithium winner of the week with a rise of 12c to $4.83 after investors followed iron ore billionaire and European construction company Cimic as they boosted their exposure to the stock via a $65 million placement at $4.08.

Brazilian Rare Earths was the best of the rare earths sector, reporting “ultra-high” grades up to 22.4% total rare earth oxides from the latest drilling at its Sulista project in Brazil, lifting the company’s share price by 43c to $3.67 and prompting a speculative buy tip from CG Capital Markets and price target of $4.25.

Northern Mining was also in the news, though not for the best of reasons after Australian Government intervention at the company and an order for Chinese investors to sell down their stake in the stock. On the market, Northern added 1c to 4.4c.

Coal, the commodity not mentioned in polite company, continues to win positive reports from banks and brokers which have a broader view of the world, including Morgans which described the carbon-rich fuel as a forgotten critical mineral, followed by an upbeat report on Stanmore Resources from Citi.

“We sense that coal equities are again being overlooked with coal markets lagging more fashionable rallies in base and precious metals,” Morgans said.

The broker sees Whitehaven Coal rising from $8.06 to $10.30. New Hope could rise from $4.97 to $5.45. Coronado is poised to move up from $1.12 to $1.80, and Stanmore is tipped to increase from $3.28 to $4.20.

Other news and market moves of interest this week included:

  • Astron Corporation adding 15c to 80c after striking a deal with U.S.-based Energy Fuels for the development of the Donald mineral sands and rare earths project in Victoria.
  • WA Resources falling by $4.52 to $16.96 despite reporting a fresh batch of niobium-rich assays from its Luni project in WA.
  • Group6 Metals losing 0.3c to 3c after filing an update on tungsten mining on Tasmania’s King Island.
  • Equinox Resources adding 5c to 38c after reporting a resource of 108.5 million tonnes of 58% director shipping hematite iron ore at its Hamersley project close to the Solomon mine of Fortescue Metals.
  • Fortescue slipping 32c lower to $24.16 and scoring a sell tip from Macquarie Bank which reckons the pure-play iron ore leader is on its way down to $13.50, a potential fall of 44%.