Gold continues its breakout run, and silver is chasing it

Gold surged in after-hours trade on Tuesday, with the spot price for the precious metal up to $US1,843.95 ($2,584.62) an ounce, or well on its way toward the all-time record price of $US1,921 an ounce that was set in 2011.

It is also well past the $US1,825 mark that was seen as a key resistance level by analysts.

The most actively traded August gold futures are currently priced at $US1,847.4 an ounce.

But while the excitement revolves around gold and whether it can break past $US2,000 an ounce before the end of this year — a goal that seems increasingly likely — the big gains could come from silver.

In the past week, spot silver has jumped 18 per cent to $US22.65 an ounce with Kitco News reporting that it might have more room on the upside as it is not even in the upper range of its historical trading range.

Silver hit a record of $US49.45 an ounce in January 1980.

Gold exploration continues apace

The rise in gold prices is welcome for explorers like Legacy Iron Ore (ASX:LCY), which has intersected significant gold mineralisation in nearly every hole drilled in its infill program at the Mt Celia project in Western Australia’s South Laverton region.

Notable results from drilling at the Kangaroo Bore and Blue Peter deposits include 2m grading 12.21 grams per tonne (g/t) gold from 68m and an extremely high-grade hit of 7m at 858g/t gold from 78m.

The results provide increased confidence in the known mineralisation and increases the likelihood of additional resources being established.

Legacy will now carry out metallurgical test work and reverse circulation drilling on early-stage targets.

Meanwhile, Zenith Minerals (ASX:ZNC) has restarted drilling at its Red Mountain project in Queensland where maiden drilling in June hit high-grade near-surface gold intervals.

This included a 6m intersection at 12.3g/t gold from surface within a broader zone of 14m at 5.5g/t gold.

The company notes that drilling to date has only tested about 250m of a 1,200m long gold anomaly. The current campaign will test for continuity of gold zones and attempt to define the limits of the gold system.

Over in Alaska, White Rock Minerals’ (ASX:WRM) geological reconnaissance and systematic soil sampling of the Last Chance target has returned high-grade gold.

The company noted that rock chip sampling returned up to 77.5g/t gold while soil samples had delivered up to 7.1g/t gold.

This has defined a 6km long system that is up to 1.2km wide with the strongest gold-arsenic response in a central zone of about 2km.