On Thursday, Bank of America updated its precious metal price outlook and named its top precious metal stock picks for investors to buy heading into the second half of 2021.

BofA Lowers Commodities Estimates: Analyst Michael Jalonen cut his 2021 average gold price estimate by just 0.8%, reducing it from $1,843/oz to $1,828/oz. Jalonen also cut his silver price target to $27.71/oz, down 3.9% from his previous estimate of $28.84/oz.

Related Link: Analyst Expects Rebound In Gold M&A In The Second Half Of 2021

Jalonen also reduced his 2021 copper price estimate by 6.7% from $10,572/t to $9,868/t. After a strong run in 2020, Jalonen said policy uncertainty has been the major reason industrial raw materials costs have lagged in 2021. However, he said he remains constructive on raw materials prices and sees opportunities for investors within the space.

Jalonen said the North American precious metals group as a whole is fairly valued, with stocks trading roughly in-line with their long-term average multiple relative to net asset value.

“Our top picks can generate robust free cash flow at $1,800/oz gold and deliver on shareholder return priorities,” he said.

BofA's Top Picks: Jalonen specifically named the following top metal stock picks.

  • Top senior producer: Newmont Corporation (NYSE: NEM), Buy rating and $80 target.

  • Top royalty & streaming company: Franco Nevada Corp (NYSE: FNV), Buy rating and $163 target.

  • Top intermediate precious metals pick: Pan American Silver Corp. (NASDAQ: PAAS), Buy rating and $42 target.

  • Top intermediate gold producer pick: SSR Mining Inc (NASDAQ: SSRM), Buy rating and $22.25 target.

  • Top copper pick: Hudbay Minerals Inc (NYSE: HBM), Buy rating, $10.25 target.

Benzinga’s Take: Despite growing inflation concerns, gold prices have likely disappointed investors in 2021.

A large part of gold’s 5.3% decline year-to-date may be Bitcoin (CRYPTO: BTC) and other cryptocurrencies, which some investors and analysts believe are now surpassing gold as the preferred inflation hedge investment.

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