Here’s why the Centamin share price is pumping

Centamin (LON: CEY) share price has gone parabolic in the past few days. It has jumped for five straight days and moved to its highest point since December 27th of last year. Data by TradingView shows that it has soared by over 30% from its lowest point in 2023.

Gold price is soaring

The main reason why Centamin stock price is surging is that gold has gone parabolic in the past few days and moved to a record high. 

Gold has jumped by 15% in the past 12 months and by 3% in 2024. It was trading at $2,126 on Wednesday, a few points below its all-time high of $2,135.

Analysts are optimistic that the price will continue rising because of three key tailwinds. Interest rates are set to start falling in the coming months now that the American economy is slowing. Consumer confidence, durable goods, and factory orders have all slumped recently.

Second, many central banks have turned to gold’s stability at a time when Washington has weaponised the US dollar. Banks like those in China, Turkey, and Zimbabwe have accumulated vast amounts of gold.

Further, there is an ongoing demand for alternative assets around the world. This explains why private equity and cryptocurrency inflows have surged hard in the past few months.

Centamin benefits from the rising gold prices because of its role in the industry. It is a gold mining company with a big presence in Egypt. 

Its most recent results showed that its annual gold production came in at over 450,058 oz, leading to over $892 million in revenues. It sold gold at the average price of $1,983.

The company aims that it will boost its gold production to between 470k and 500k ounces this year. As such, higher gold prices will help it grow its revenue and profitability. It is also highly conservative since it expects the average gold price to average between $1,200 and $1,350.

Centamin share price analysis

CEY chart by TradingView

The other reason why the CEY stock price has surged is that of technicals. On the daily chart, the stock had formed a falling wedge pattern before the current rebound. In most periods, this pattern is one of the most bullish signs in the market. It had also formed an inverse head and shoulders pattern.

Centamin shares have also surged above the 50-day and 100-day moving averages, which is a bullish sign. Further, it is nearing the important level at 103.60p, its highest level on December 4th. Therefore, more upside will be confirmed if the stock jumps above that level.

Synch a move will open the possibility of it soaring to the next point at 110.8p, the highest swing on April 13th.