Gold Digger: Gold’s little brother silver is officially along for the ride

This week, gold ascended new highs. The record rally which saw gold blow past $US2,070/oz ($2,851/oz) also took silver with it.

Based on historical silver data, there has only ever been two occasions when the silver price has run hard — and both times followed recessions.

History also tells us that silver has the ability to outperform its precious metal rival once it gets going:

Silver has now reached $US29.37/oz, up 151 per cent from its mid-March low of $11.70/oz.

Gold is currently up ~40 per cent over the same period.

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So, where does gold (and silver) go from here?

“Given the continued tumble of the dollar and gold’s ascendancy to $2,070, I’m inclined to think that $2,150 would be an achievable near-term target,” says Barani Krishnan, senior commodities analyst at Investing.com.

“Even if the NFP [US non-farm payrolls] report for July surprises to the upside and triggers a correction in gold, the downward move would not be much given that another US COVID-19 stimulus bill is coming,” he says.

“The Fed has also signalled that it will keep rates ultra-low to support the economy, suggesting that any rebound on the Dollar Index will be limited.”

Winners & Losers

Here’s how ASX-listed gold stocks performed for the period August 03–07 [intraday]:

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:

Weekly Small Cap Highlights

Drilling will restart at Equus Mining’s (ASX:EQE) high-grade, development-ready Cerro Bayo silver-gold project in southern Chile later this month.

Late last year, Equus signed a binding deal with TSX-listed miner Mandalay Resources to acquire the Cerro Bayo Mine district and infrastructure in Southern Chile.

This includes a processing plant which has produced about 600,000oz of gold and 45 million ounces of silver since 1995.

Alliance Resources (ASX:AGS) surged after hitting thick high grades at the 181,000oz Weedanna gold deposit in South Australia.

The 8m long intercept grading 21.1 grams per tonne (g/t) was located in a new, high-grade gold shoot “illustrating potential to grow the resource at depth”, the company says.

Formerly Brazil-focused explorer Meteoric Resources (ASX:MEI) is about to start drilling its newly acquired Palm Springs project in Halls Creek, WA.

Twenty Seven Co (ASX:TSC) almost doubled the size of its flagship Rover project to 461sqkm this week. The new ground includes three, largely unexplored historic gold targets.