Gold on rollercoaster ride but the gains might be coming
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Gold prices have plunged 3.4 per cent to $US1,486 ($2,562) per ounce as US markets fell overnight.
However, commentators remained unfazed by gold’s performance to date – resembling a roller coaster ride – with Kitco quoting State Street Global Advisors chief gold strategist George Milling-Stanley as saying that investors had the wrong perspective on gold.
“The benefit of having gold is that it is an incredibly liquid asset,” he said. “Gold is doing exactly what it’s supposed to do in a liquidity crisis.”
Milling-Stanley added that gold would bounce back once central banks started flooding money into financial markets.
This is in line with previous commentary that similar falls in the gold price had occurred during the 2008 crisis as investors sold gold to gain liquidity.
Gold explorers are definitely keen to advance their operations, with Red 5 (ASX:RED) increasing global resources at its King of The Hills project in Western Australia’s Eastern Goldfields region up to 4.1 million ounces of contained gold.
And there is likely to be more growth over the horizon with the company’s resource extension drilling returning high-grade gold hits.
Top hits from underground drilling outside the resource area include 5.2m grading 23.7 grams per tonne (g/t) gold, 2.8m at 33.2g/t gold and 27.9m at 4.3g/t gold.
Hits above 5g/t gold are generally considered to be high grade.
Drilling targeting extensions west of the open pit also returned results of 13m at 3.4g/t gold and 5m at 8.1g/t gold.
Mineralisation remains open in all directions and managing director Mark Williams says the results demonstrate the potential to further grow resources at King of the Hills.
Meanwhile, Dreadnought Resources (ASX:DRE) has confirmed the presence of bedrock gold mineralisation with maiden drilling at the Metzke’s Find prospect within the Illaara gold-VMS project in Western Australia returning a top hit of 2m at 6.8g/t gold from 79m.
The company said the results had turned its focus away from finding shallow oxide intercepts towards deeper workings.
Predictive Discovery (ASX:PDI) has identified two large prospective gold mineralised zones at its Kaninko project in Guinea after completing soil sampling, power auger drilling and trenching programs.
Assays from bottom-of-hole auger drilling sampling at the North-East Bankan prospect returned gold results of up 11.9g/t gold and 10.3g/t gold, which are higher than shallower composite results of 7.83g/t gold and 0.43g/t gold respectively that it had previously received.
Trenching at the Bankan Creek prospect has revealed broad widths of gold mineralisation at shallow depths with top results of 18m at 1.6g/t gold and 1m at 15.45g/t gold.
Predictive will soon start 2,500m of aircore/reverse circulation drilling across both prospects along with one target on the Kankan permit.