Why is PDI Gold (ASX: PDI) soaring more than +11%?
PDI Gold (ASX: PDI) is up strongly today primarily because of the gold price rather than fresh company-specific news. Gold has rebounded sharply following the Fed’s rate hike, rising around 1.8% on Thursday and another ~0.3–0.4% in Asian trade today.
- Over the last 24-hours the combination of falling oil prices, easing inflation concerns and lower bond yields has supported both Treasuries and bullion despite the Fed tightening rates 0.25%.
PDI is magnifying that move because it now has substantial operating leverage to gold following the combination with Robex. It owns the producing Kiniéro and Nampala mines, alongside the large Bankan development project; PDI produced 64,026oz in the June quarter and retains 2026 production guidance of 198–220koz.
We believe todays surge is a simple high-beta gold trade. PDI fell ~6% yesterday, so today’s move is also being amplified by a rebound from that weakness, with the dominant catalyst being bullion’s sharp post-Fed recovery.
- We like PDI below $5 targeting new highs in the coming months.
