Positive ratings actions in the gold sector are more likely in the next 12 months than they’ve been in several years, Standard & Poors said in a new report.

However, credit analyst Jarrett Bilous tempered this optimistic outlook, noting that extensive upgrades aren’t expected across the sector globally.

“In fact, we believe issuer credit profiles will remain highly sensitive to gold’s historically volatile price and to foreign exchange rates,” he said.

With gold prices near US$1,300 – not far off the multi-year lows achieved at the end of 2015, Bilous wouldn’t be surprised to see sharp moves in the future.

He’s also unsure what financial policies and operating strategies will change if gold prices remain at current levels, or rise in year ahead.

Nonetheless, S&P’s higher price forecast for the precious metal, combined with an industry-wide focus on both debt and cost reduction, result in a stronger outlook.

“Issuer credit profiles are highly sensitive to relatively modest increases in our gold price assumptions and sustained high prices are likely to translate into earnings and cash flow above our previous expectations,” Bilous wrote. “Given fairly recent sectorwide dividend cuts and a focus on debt reduction, we expect most issuers to keep spending at a measured pace.”

He pointed out that many gold companies have come under under pressure as prices fell faster than operating costs. That has left little or no headroom in terms of earnings.

The analyst also noted that more than a quarter of the ratings include a negative outlook.

S&P now anticipates gold prices will remain well above US$1,100 per ounce – a level considered a downside rating trigger for several companies.

Its revised price assumptions are US$1,300 for the remainder of 2016, US$1,250 in 2017, and US$1,200 in 2018.

Goldcorp Inc. tops the agency’s list as the only issuer with a BBB+ credit rating, while Hecla Mining Co. sits at the low end as the only B- rated company.