AngloGold Ashanti ADR (NYSE:AU) shares fell 4.9% in pre-market trading to $106.82 as gold prices extended a decline following Federal Reserve Chair Kevin Warsh’s comments at the Jackson Hole symposium.
Warsh indicated that while recent inflation data had provided some encouraging signs, it did not demonstrate that underlying inflation trends had improved sufficiently. His comments contributed to increased market expectations for another Federal Reserve interest-rate increase.
The decline in AngloGold Ashanti came alongside weakness across other gold-mining shares, according to the supplied information, indicating that the move was not limited to the company.
Markets increase expectations for September rate hike
Market-implied expectations for a Federal Reserve rate increase in September rose to approximately 57%–60% following Warsh’s remarks, compared with around 36%–40% beforehand, according to CME FedWatch data cited in the supplied information.
Gold subsequently fell more than 3% in a single session, with prices remaining under pressure as September trading began.
Higher interest rates can increase the relative attractiveness of yield-bearing assets compared with gold, which does not generate interest income. However, movements in bullion prices can reflect multiple economic and market factors.
Gold producers can also experience significant share-price movements when the underlying commodity price changes because movements in realised gold prices can affect revenue and margins.
Analyst consensus target stands near $113
The consensus 12-month analyst price target for AngloGold Ashanti stands at approximately $113, according to the supplied information, following revisions to assumptions including revenue growth and profit margins.
Analyst price targets represent estimates and do not indicate future share-price performance.
AngloGold Ashanti shares had gained approximately 26% during the previous week and reached around $121 before Tuesday’s pre-market decline.
Other gold-mining stocks were also indicated lower ahead of the opening bell.
Broader U.S. equity markets trade lower
The decline came during a weaker session for broader U.S. equity markets. The S&P 500 fell 0.5%, the Dow Jones declined 0.6% and the Nasdaq was down approximately 1.0%.
Oil prices were also elevated following a tanker strike in the Strait of Hormuz, adding to market attention on inflation and interest-rate expectations.
AngloGold Ashanti’s 4.9% pre-market decline therefore coincided with lower gold prices, weakness among other mining stocks and a broader decline in U.S. equities. The supplied information does not establish the extent to which any individual factor caused the share-price move.
AngloGold Ashanti stock price
