Gold price bounces from one-year low, silver looking ‘resilient’
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Gold gained 3.8 per cent over the past 10 days to reach $US1,750 per ounce ($2,238/ounce) as investors fret about inflation.
The yellow metal bounced off its recent low point of $US1,695 per ounce on March 8, and has been heading upwards since the US Congress passed its $US1.9 trillion stimulus package.
“Quite a few customers — more so from the retail and wholesale side, including high net worth individuals — picked up gold because prices are lower,” Brian Lan, managing director at Singapore-based dealer GoldSilver Central told Reuters.
Forecasts unveiled this week by the Federal Reserve point to an inflation rate of 2.4 per cent this year, and 2 per cent next, rising to 2.1 per cent in 2023 which could be bullish for gold.
The US central bank said this week that it is not expecting any rise in short-term interest rates from their near zero low until 2023.
Ten-year US bond yields have picked up, however, and reached a one-year high of 1.64 per cent after rising off a record low of 0.5 per cent last August.
“The behaviour of gold in the first quarter lends credence to the importance of real yields [after inflation],” said Deutsche Bank analysts in a note.
The Germany-based investment bank said that a lift-off in risk-free bond yields from record lows has the potential to cause a gradual unwinding of gold investment in the months ahead.
Silver has also moved higher this week to $US26.50 per ounce ($33.85/ounce) which analysts said was related to the dovish interest rate stance of the US central bank.
“We think silver will be comparatively resilient in a global recovery, although more so under risk-friendly steepening than disorderly tantrum-like bouts, in which case silver tends to weaken more rapidly than gold,” said the Deutsche Bank analysts.
Several ASX gold explorers announced Thursday some impressive drilling results for their projects in various jurisdictions including Argentina, Queensland, Victoria and WA.
Beacon Minerals (ASX:BCN) said drilling results for its Jaurdi gold project near Kalgoorlie in WA had returned high grades from bottom of hole intercepts.
Assay results included 8m at 6.53 grams per tonne (g/t) gold from 56m for its Big Cat prospect, and 6m at 3.11 g/t gold from 29m at its Lynx discovery.
The explorer will continue with its drilling program into May as there is still more than 500m of potential strike to be tested at Big Cat.
Navarre Minerals (ASX:NML) has reported outstanding gold and silver assay results for its Glenlyle tenement in western Victoria.
Intercepts for the company’s Morning Bill prospect include shallow drill hits up to 71.8 g/t silver, and the detection of a broad 65m gold zone.
“The latest results provide further evidence that Morning Bill is a 500 million year-old, large gold-silver system that is concealed beneath a veneer of unmineralised cover – detecting it has entailed many technical challenges,” managing director Ian Holland said.
The mineralised footprint of Morning Bill has continued to grow and has now surpassed 1,000m of strike, he said.
New Peak Metals (ASX:NPM) has detected visible gold in drilling at its Morena prospect at its Cachi gold project in Argentina’s Santa Cruz province.
“These observations of visible gold and alteration at depth in Cachi indicate we are getting closer to realising a strongly mineralised system and could be on the verge of ‘discovery’,” chairman Nick Mather said.
Great Southern Mining (ASX:GSN) said two large geochemical soil anomalies had been discovered at its Leichhardt Creek gold prospect at its Edinburgh Park project in Queensland.
Chief executive Sean Gregory said analysis of the soil surveys “presents compelling evidence of circular metal donation trends consistent with kilometre-scale intrusive related gold-copper systems”.
The explorer has a 1,000sqkm tenement surrounding Evolution Mining’s (ASX:EVN) Mt Carlton gold mine in Queensland.