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Fresnillo Share Price Forecast: Will It Break £10 In 2023?

After starting the year strong, Fresnillo share price has tumbled once again. The price has hit new yearly lows by breaking below the January low of 786p. Analysts are predicting very high volatility in global markets throughout this week due to the release of CPI data.

Fresnillo Mexico is a mining company which is headquartered in Mexico but listed in the UK. The Fresnillo stock trades on the London stock exchange under ticker LON: FRES. It is also a part of the FTSE 100 index. Since the start of the year, the price has lost 12.5%.

As per the recent Fresnillo news, the company has met it 2022 guidance. During last year, Fresnillo produced 53.7 million ounces of silver and 635,000 ounces of gold. These metals were mined at the entity’s Mexican mines. The data shows that in 2022, the company’s silver production increased from the previous year.

However, the company saw a 7.8% decline in its Q4 silver production which stood at 12.5 million ounces. Analysts expect a further increase in production this year due to the company’s strong balance sheet and higher margin assets.

Fesnillo stock is also affected by the prices of precious metals. In January 2023, the shares rallied as the Gold price reached $1950. As the gold price has fallen to $1860, Frednillo shares are also experiencing a corresponding sell-off.

Fresnillo Share Price Daily Chart

On daily timeframe, LON: FRES broke out of the downward trendline in October 2022. This triggered a 42% price rally that took the Fresnillo share price to 996p. However, the price failed to break above the key psychological level of 1000p and faced a major correction.

Since this rejection, the price has lost 20% of its value and now trading at 794p. A closer look at the chart also tells us that the price is getting supported by the 200-day moving average. If bulls hold this level for a couple of weeks then I expect another retest of 1000p in the coming months.

However, a very ugly scenario might unfold if the price breaks below 200-day moving average. In such an event, I expect the price to retest July 2022 low of 640 GBX.

Fresnillo share daily chart
Fresnillo Share Price Daily Chart