Are gold prices rebounding? This gold bull thinks so

Could gold prices have hit bottom? The precious metal had slipped below the $US1,690 ($2,181.68) mark before rebounding to $US1,730.10 an ounce after US bond yields retreated and the US Government passed a $US1.9 trillion COVID-19 relief bill.

DoubleLine chief executive Jeffrey Gundlach certainly believes some, saying that the low of $US1,681 an ounce it hit on Monday could be the lowest level that gold would drop to for some time.

“Gold has really underperformed other froth assets like Bitcoin by incredible amounts, almost inconceivable amounts since that peak in gold above $2,000,” he said during a webinar, adding that it is now very likely to bounce because of how powerful the selloff had been.

“Long-term gold is pretty interesting. Our model shows that gold is at fair value at $1,761,” Gundlach added.

UK research firm Capital Economics added that while it had downgraded its outlook on gold for the year, it believed that the price is close to the bottom.

Its assistant economist Adam Hoyes noted that he does not expect bond yields to move much higher and that improving physical demand in China and India will provide further support for gold prices.

Here’s a couple of recent, well-timed hits from some ASX small cap gold hopefuls.

Australian small cap gold companies

The rebound in gold prices is well-timed for Black Cat Syndicate (ASX:BC8), which now has a total resource of more than 1 million oz of gold after upgrading resources at the Imperial, Majestic and Sovereign deposits.

Resources at the three deposits were up 47 per cent to 5.2Mt grading 2.3 grams per tonne (g/t) gold for 378,000oz of contained gold, taking the company’s total inventory up to 14.3Mt at 2.2g/t for just over 1Moz of gold.

There are more upgrades on the horizon though with the company noting that work is underway at the Fingals Fortune, Fingals East, Jones Find and Rowe’s Find deposits.

New targets have also been established in the Greater Majestic area including down plunge of Imperial, at Sovereign and directly south of Majestic.

Black Cat Syndicate (ASX:BC8) share price chart

Meanwhile, Mako Gold’s (ASX:MKG) drilling has extended shallow, high-grade gold mineralisation at the Tchaga prospect within its flagship Napié project in Côte d’Ivoire.

16 of the 19 reported holes intersected gold mineralisation with several holes intersecting multiple zones of mineralisation that are indicative of West African gold systems.

Notable results include 5m at 7.52g/t gold from 156m and 30m at 1.57g/t gold from 103m.

Mineralisation at Tchaga extends as stacked lenses over a strike of greater than 1km and over a width of up to 500m.