Gold Digger: Gold bulls are out in force, but expect turbulence

With gold spending most of the past week hovering around the US$1,800/oz (A$2,485/oz) mark, speculation has turned away from whether the precious metal can hold its gains to asking if it can test hit the US$1,850/oz mark.

Gold is currently sitting at US$1,807.83/oz.

The rather pertinent question comes as a survey of analysts by Kitco found that 69% are feeling bullish as we head into the Christmas holidays.

However, the positive vibes come with a warning. Expect lots of volatility on low trading volumes.

“Nine out of the last ten years, you would have made money buying gold on the last trading day before Christmas and selling by 11 January,” Blue Line Futures chief market strategist Phillip Streible told Kitco.

“There is always a lot of uncertainty at the start of the year, so investors probably feel comfortable holding a little bit of gold as a safe-haven hedge.”

This contrasts with Equiti Capital market analyst David Madden who said that the strong US dollar will weigh on the metal and limit any gains.

Given the bullish sentiment, it is no wonder that some have started wondering if gold could hit the US$1,850/oz mark.

“We are getting higher lows. That ultimately brings about higher highs. In the near term, a spike up to $1,815 on the February contract could be hit. If we blow through that, it is clear sailing up to $1,833, and then $1,875,” Walsh Trading co-director Sean Lusk told Kitco.

Winners & Losers

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WEEKLY SMALL CAP STANDOUTS

NewPeak Metals (ASX:NPM)

Drilling at the company’s Satulinmäki prospect in Finland has returned consistent mineralisation across the majority of the 10 holes.

Of especial interest is SM0017 over 200m east of the main drilling area, which intersected encouraging visual mineralisation that could represent an extension to the footprint of known gold mineralisation.

A full evaluation will be made when assay results are available.

Golden Rim Resources (ASX:GMR)

Exploration has also proved to be a winner for Golden Rim with the second round of resource drilling at its Kada project in Guinea returning intriguing results, topping up at 96m grading 3.3 grams per tonne (g/t) gold from a depth of just 28m including 29m at 8.5g/t gold from 79m.

All new gold intersections are shallow and fully or partially oxidised with extensive additional oxide gold mineralisation located in gaps in the previous drilling, the company said.

These results are expected to add significant ounces and boost the gold grade when the company delivers its maiden resource estimate in late January 2022.

Bardoc Gold (ASX:BDC)

With St Barbara’s recommended takeover offer valuing Bardoc Gold at about $157m, or 53c per share, it isn’t the slightest bit surprising that shares in BDC were amongst the biggest gainers this week.

This comes after a strategic review identified St Barbara as the logical owner of Bardoc’s namesake project particularly given the rail and highway directly connecting Bardoc’s key assets with St Barbara’s Leonora processing plant.

Dacian Gold (ASX:DCN)

There’s significant potential for mineralisation to extend to a depth of more than 500m below the bottom of the company’s Heffernans open pit, after drilling returning an intersection of 212m grading 0.9g/t gold from 598m.

This includes significant zones of 27.5m at 1.7g/t gold from 605.8m and 4.1m at 9.6g/t gold from 807m.

Syenite pipes at Dacian’s Jupiter mining complex span over a strike extent of 2km with syenite hosted bulk stockwork mineralisation remaining open at depth.

Assays are pending for a further four diamond holes.