Gold Digger: Gold’s heading for US$4500 and the hidden risk to high silver prices

• Gold is at record highs, powered beyond US$3850/oz by a US Government shutdown
• But Argonaut has lifted its peak forecast to US$4500/oz 
• Earnings forecasts up across the board for big miners and emerging developers

Gold is continuing to head higher, spurred again to over US$3850/oz as the US Government heads into its first shutdown in seven years.

There are many things to say about that. But as with many of the political moves in the States over the past year, it’s not positive for confidence in the US economy, dollar or treasuries.

The shutdown comes after a host of brokers, asset managers and analysts lifted their price targets on the yellow metal again this week.

Goldman Sachs said upside risks were emerging to its US$4000/oz by mid-2026 target, with ETF purchases by private investors starting to run higher than the bank’s expectations.

State Street sees a 75% probability now that gold breaks US$4000/oz by Q4 2025 or Q1 2026, delivering the strongest year for returns since 1979.

Previously bearish, Max Layton at Citi now thinks gold is ‘like the art market, while local brokers have also adjusted forecasts higher.

Argonaut’s Hayden Bairstow and Patrick Streater on Monday lifted their peak gold price prediction from US$4000/oz to US$4500/oz. Drink that in.

That’s over close to $7000/oz, portending margins for Aussie producers that run far beyond the gold price itself when Trump came to power.

“We are upgrading our gold price outlook to reflect the ever-improving backdrop for the yellow metal. Our quarterly forecasts for the remainder of FY26 rise 11-13%, with the spot price expected to push beyond US$4,000/oz by the end of FY26,” Bairstow and Streater said.

“Our FY26 and FY27 forecasts rise 10% and 9%, while our FY28, FY29 and FY30 price forecasts rise 14%, 17% and 20%, respectively. We have also increased our long-term gold price assumption by 14% from US$2,200/oz to US$2,500/oz.”

Behind all this is rising government debt, led by the US, inflation fears and positive gold ETF flows, they said.

That means upgrades for most producers.

“Producers with longer life assets are the key beneficiaries from the changes to our gold price outlook. We upgrade our price targets for NST and EVN by 23% and 36%, while GMD and RMS see price target increases of 32% and 31% respectively,” Bairstow and Streater said.

“Producers with mine lives of ~10 years see upgrades of 13-28%, led by PNR, RRL, CMM and VAU, which see price target upgrades of 28%, 24% and 20% respectively. We have upgraded our price targets for international producers PRU and EMR by 20%.”

Who else leads the way?

With gold producers having posted enormous gains this year – the gold sub-index has nearly doubled YTD – attention is starting to flow down into the developer end of the market.

If gold does hit US$4075/oz in FY27 and US$4500/oz by the end of 2027, as Argonaut predicts, there’ll be plenty more steam for mine developments across the spectrum.

That’s prompted future earnings upgrades for would be miners, some of whom are high on Argonaut’s preferred picks list.

Among those its analysts have taken a shine to are Magnetic Resources (ASX:MAU), owner of the Lady Julie gold project near Laverton, where Argonaut has lifting earnings forecasts 63% in FY27 and FY28 and 87% in FY29, and Ballard Mining (ASX:BM1), owner of the Mt Ida gold project near Kalgoorlie, which has seen its forecast earnings for its potential first year of production in FY29 lifted by 39%.

Argonaut has a spec buy and $4.20 target on Magnetic (current price $1.56) and spec buy and $1 target on Ballard (current price 68c).

Its other preferred development play in Australia is the Tim Goyder chaired owner of the 2.3Moz Bullabulling gold project Minerals 260 (ASX:MI6), along with international names WIA Gold (ASX:WIA), Turaco Gold (ASX:TCG) and Santana Minerals (ASX:SMI).

Silver conundrum

Gold is not the only precious metal roaring this year.

Silver recently recharged, climbing to US$47.21/oz on Friday as it heads for the record high hit in the Hunt Brothers squeeze in January 1980 of US$50/oz.

That mark was also threatened in 2011, with gold’s poor cousin having spent over a decade in the doldrums since.

But silver is an unusual market.

It does have a large component of demand in the same centres as gold – investment and jewellery. But it also counts itself as an industrial metal, prized for its use in photovoltaic cells.

“On the one hand, silver’s remarkable rally should further elevate its investment appeal among safe haven buyers,” Metals Focus said in a report this week.

“On the other, mounting cost pressures are set to intensify thrifting and potentially also substitution trends in some key industrial applications.”

Metals Focus says silver paste is second only to silicon wafer in the material costs of a solar panel, around 11-13% of the module.

With silver more than doubling in recent years, manufacturers have been making “considerable progress” to reduce silver usage per watt.

“The latest rally, however, has added urgency to the pursuit of breakthrough cost-reduction strategies. As technologies continue to evolve and scale up, this could increasingly erode silver demand within the PV sector,” Metals Focus analysts said.

“As touched on above, the ability to thrift the use of silver in the PV industry has been a constant feature of the market for comfortably more than a decade. However, the risk is that outright substitution may also start to occur.”

Strategies include replacing silver with copper and key components in various cell type and reducing line widths.

“Some manufacturers have also replaced silver with base metals like copper and nickel in rear electrodes, and are in the process of removing silver from the cell’s reverse side. Collectively, these strategies are projected to cut silver consumption per watt by around 15–20% this year,” Metals Focus said.

Winners and losers

Here’s how ASX-listed precious metals stocks are performing:

Gold medal performers

Who were some of the top precious metals names this week?

Tambourah Metals (ASX:TMB)

These shares nearly tripled before a pullback on Friday.

Some interesting gold exploration results on Wednesday were backed up by news one of Australia’s biggest mining investment funds was taking a big stake in the $29 million capped minnow.

Tribeca Investment Partners will emerge as a substantial shareholder after playing a cornerstone role in a $3m strategic placement.

That cash call will give the junior $4.5m in reserves to run drilling at its Beatty Park South target in WA and came in at a price of 8.5c. Its shares were already running to 18c by Friday morning before sliding to 15c at the close.

With gold prices at record levels, Beatty Park South first caught the eye in early August with shallow aircore drilling hitting grades of up to 126g/t Au.

Follow-up drilling has confirmed high grades at shallow depths, including 24m at 18.8g/t from 20m in BPAC028, 3m at 3.7g/t Au from 44m in BPAC029 and 3m at 6.6g/t Au from 60m in BPAC030.

Just 25% of a 500m-long gold in soil anomaly has been tested to date, but the project near Meekatharra is well located if something more substantial is found.

Nelson Resources (ASX:NES)

Nelson is the latest partner of the polygamous mining contractor MEGA Resources, which has signed deals with a catalogue of WA gold juniors in its bid to enter the Aussie mining game.

Under a right-to-mine deal, MEGA will run the numbers and dig the dirt at Nelson’s Yarri project, 140km northeast of Kalgoorlie, one of the earliest stage projects to receive the JV treatment with the Indian-backed mining contractor.

Nelson will receive 30% of profits from the sale of ore, with MEGA to fund the operations, initially via $500,000 for drill programs, then a financing facility of up to $10m should a decision to mine be made.

The deal covers three mining lease applications Nelson has made at Yarri.

Yarri is located on the doorstep of Northern Star Resources’ (ASX:NST) Carosue Dam operations, an operation that relies on a number of ore sources. The unusual aspect of the MEGA deal is it doesn’t yet have a JORC resource.

The mining contractor owns the Rama gold project near Forrestania, but also has JV deals with a host of junior companies including Javelin Minerals (ASX:JAV) and Rumble Resources (ASX:RTR) over the more advanced Eureka and Western Queen projects.

Nelson shares ran over 125% higher for the week by Friday morn before dropping to a 100% gain after a 20% dip on Friday.

Dateline Resources (ASX:DTR)

And another special mention to now $2.2bn capped Dateline, which added a RC rig to its diamond rig at the Colosseum gold mine in California.

The company is seeking to grow the 1.1Moz project, which has pulled in huge investor interest with its location near the Mountain Pass rare earths mine.

Dateline is also planning to drill newly identified gold and rare earths targets. DTR initially starting running after a shoutout for Colosseum on Donald Trump’s Truth Social account.

It’s up 6400% in the past 12 months. Wild. Dateline shares sured close to 20% on Friday with nothing to report other than the resignation of non-exec director Bill Lannen.