Gold Digger: Sizzling oil prices suggest gold will hit US$2000/oz soon
Link copied to
Gold is re-starting its bull rally as two major obstacles — higher US Treasury yields and Bitcoin — fizzle.
“Strong headwinds from parabolic Bitcoin and rising bond yields appear to have run their course,” Bloomberg Intelligence senior commodity strategist Mike McGlone said in a note.
“Weaker-than-consensus April and May U.S. unemployment reports [also] support our key takeaway that gold and silver are ripe to resume their bull markets.
“About $US2,000 is key gold resistance, which we expect to eventually be breached.”
Gold and oil usually (not always) rise and fall in loose tandem.
The belief is that rising oil prices push up inflation, increasing demand for gold as an investment hedge.
Right now, gold is running at “an unsustainably steep discount” to crude oil which is booming, according to Bloomberg Intelligence.
“It’s the battle between the most significant commodity with low elasticity of supply, gold, vs. a highest, crude oil, and we expect trend resumption favouring the metal,” McGlone says.
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 junior joint venture partners hit 200m of “intense IOCG alteration”, including ~50m of copper sulphides in its first deep exploration hole at the ‘Elizabeth Creek’ project in South Australia.
Iron oxide copper gold ore deposits (IOCG) — like BHP’s Olympic Dam mine or more recent Oak Dam discovery — can be tremendously large, and simple-to-process concentrations of copper, gold and other economic minerals.
Renegade Exploration (ASX:RNX) will sell its ‘Yandal East’ project JV interest to fellow gold explorer Strickland for $800,000 cash, 40m shares and a 0.5% net smelter royalty on any future production.
For Strickland, this acquisition represents a major extension to its flagship ‘Horse Well project, ~30km from Northern Star’s (ASX:NST) 10moz Jundee operation.
This emerging gold producer hit thick, high grades — including 6m grading 11.34 grams per tonne (g/t) gold from 74m – at ‘Viper’, part of the flagship Morila project in Mali.
“These are outstanding results. The scale of the mineralised system at Viper continues to grow with each drillhole,” managing director Dr Michael Anderson says.
“The delineation of surface mineralisation in the southern part of the deposit will provide another source of early oxide feed as we ramp up the Morila plant.”
Commencement of mining at Viper has been “expedited” with early works already underway and mining expected to begin in the coming weeks.