Acorn Accumulator Analytics downgraded AngloGold Ashanti (AU) to a near-term Sell rating. The firm cited emerging gold market weaknesses and deteriorating technical indicators for the metal.
Analysts forecast a significant decline in gold prices during the current quarter. This trend could erode AngloGold’s recently expanded profit margins and pressure gross profits.
The analysis warns of a potential 20% or greater drop in share value if technical support levels fail. Despite strong fundamentals, bearish sentiment toward gold is expected to drive the stock lower.
AngloGold currently trades at a premium compared to its peers based on its EV/EBITDA ratio. The firm concludes the stock is overvalued at current levels.