Regis, Westgold lead gold selloff after downgrades
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The news: Gold miners Regis Resources and Westgold Resources slumped on the ASX despite an uptick in global spot gold prices, after both were struck by downgrades by Canaccord Genuity.
The numbers: Regis (-5.458%), Westgold (-4.36%) and Vault Minerals (-3.95%) were worst hit by the selloff, making up three of the worst four performing ASX 200 stocks by 1:30pm AEDT.
Materials, up 0.07%, was the second worst performing sector as the ASX 200 index added 0.4%.
Spot gold rose 0.6% to USD2,769.94 ($4,392.48) per ounce.
The context: Canaccord downgraded its rating on Regis from 'buy' to 'hold'. With an unchanged price target of $3.10, the downgrade was driven by Regis' valuation, having seen its share price soar more than 60% since October. Regis last traded at $3.03.
UBS, with a 'sell' rating on the stock, increased its price target from $2.10 to $2.70, due to strong pre-reported results for the December quarter, with production beating consensus forecasts by around 7%. Macquarie raised its price target on Regis by 3% to $3.50, keeping its 'outperform' rating, due to the Q2 output figures.
Canaccord kept its 'buy' rating on Westgold but cut its target price from $5 to $4.70, on expectations that the miner's production will decrease by an average of 2% from FY26 onwards. Westgold last traded at $2.59.
Meanwhile, gold prices were spurred by a softening US dollar, after US President Donald Trump called for lower interest rates. Traders currently expect the US Federal Reserve to leave interest rates unchanged for the first half of 2025, with lower borrowing costs typically bolstering bullion prices.
The sources: Reuters, Canaccord Genuity research, UBS research, Macquarie research
