Gold Digger: JP Morgan reckons gold’s gonna take a dive to $1,520/oz by Q4
Link copied to
Gold is holding steady above US$1,800/oz – currently trading at US$1816.60.
Some players are confident the gold market will trend net positive next year as the market digests the reality of the past 24 months.
But commodity analysts at J.P. Morgan Global Research reckon the market might not be able to withstand the Federal Reserve’s plan to end its monthly bond purchases by March and plans to raise interest rates three times.
“From an average of $1,765/oz in Q1, gold prices are set to steadily decline over the course of next year to a Q4 average of $1,520/oz,” the analysts said in a 2022 outlook report.
“Industrial metals will still take time to find balance next year, keeping prices supportive over the first half of 2022, however, with relatively middling Chinese demand growth expected, prices could come under more sustained pressure later in the year. An unwinding in ultra-accommodative central bank policy will be most outright bearish for gold and silver over the course of 2022.”
However, Kitco’s Jim Wyckoff reckons big-shot banks’ commodity market forecasts are usually wrong.
“I’ll take the other side of that JP Morgan trade and predict gold prices in 4Q 2022 will be higher than present levels,” he said.
“Reason: I believe price inflation will become much more problematic in 2022 and the Federal Reserve won’t be able to do much about it.
“That scenario would be bad news for paper assets like stocks and bonds, but good news for hard assets like the metals.”
Here’s how ASX-listed gold & silver stocks are performing:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop
The company climbed 100% this week off the back of a discovery at its JV Greater Duchess Gold Project with Carnaby Resources (ASX:CNB) in western Queensland.
The assay results outlined an extremely high-grade copper gold discovery at the Nil Desperandum prospect of 41m at 4.1% copper, 0.5g/t gold from 247m, including 24m at 6.5% copper, 0.7g/t gold from 251m, including 9m at 10.3% copper, 1.2g/t gold from 264m.
Carnaby’s MD Rob Watkins said the prospect is shaping up as a major iron oxide copper gold discovery which is rapidly getting bigger and better at depth.
“The scale of the mineralised system we are seeing is exceptional,” he said.
The company announced it had successfully raised approximately $25.5 million (before costs) under an entitlement offer this week, with shares trading up 31%.
Focus says the proceeds will be used to fund plans to resume gold mining operations at its Coolgardie Gold Project which includes the 1.4Mtpa processing plant at Three Mile Hill (on care and maintenance).
An updated PFS in September 2020 highlighted the potential for a low capital cost, fast-tracked return to mining at Coolgardie and delivered an NPV7.5% of $183 million.
The company was up 15% this week, reporting assays from its 17,500m drilling campaign (RC and AV combined) at the Mt Stirling Gold Project of:
The company says an updated global MRE for the project is on track for the end of Q1 2022.
This under-the-radar ~700,000ozpa gold miner — the result of last year’s merger between ASX-listed Alacer and North American listed SSR — recently dazzled punters with a standout September quarter result.
It reported Q3 production of 186,941oz of gold equivalent at all in sustaining costs (AISC) of US$1,006/oz from its four producing assets in the USA, Turkey, Canada, and Argentina.
That’s a hefty profit margin at current gold prices above $US1,800/oz.
This week SSR announced that that commissioning and ramp-up of the sulphide plant flotation circuit at the Çöpler operation in Turkey had begun.
This is expected to boost processed gold grades, reduce reagent (chemical) use, and increase total sulphide plant throughput and gold production. All good things.
The $21m market cap stock’s share price was unchanged this week.