Gold recovers ground but new highs may be out of reach for now

Gold prices recovered ground late last week as investors scrambled for a safe haven following a rather gloomy Federal Reserve forecast for the US economy.

While gold has slipped slightly from its close of $US1737.07 an ounce on Wednesday to $US1,729.80 an ounce, it is still up 2.7 per cent from this month’s lowest close of $US1,683.65 an ounce.

In Australian dollar terms, gold is worth a still respectable $2,530.45 an ounce, though this is down from its highs earlier this year due to a fall in the US dollar.

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A forecast poll by FXStreet indicates that while investors are not fully convinced that gold will hurtle towards new highs, any downside is also limited. The poll found that on average, investors believed that over the month, the price of gold will slip to about $US1,728.64 an ounce.

The latest recovery in gold prices comes as a number of ASX small cap gold companies kick off their exploration programs.

Gateway Mining (ASX:GML) has restarted field activities at its Gidgee project in Western Australia after a hiatus due to COVID-19 restrictions.

The company is starting reverse circulation drilling aimed at expanding resources at both the Whistler and Montague gold deposits.

The two deposits currently host a resource of 3.4 million tonnes grading 2.2 grams per tonne (g/t) gold for 240,000 ounces of contained gold.

Drilling will also be carried out to test the northern extensions of the strongly mineralised Achilles target, including the high-grade S-Bend prospect, and maiden drilling at the 1.8km long Kashmir prospect on the eastern margin of the Montague Dome.

Gateway will also drill a number of new, high-ranked exploration targets generated from the recent program of data collection and assessment and complete a soil geochemical program over the northern area of the Montague Dome.

Meanwhile, Toro Energy (ASX:TOE) has started gold and nickel drilling at its Yandal project about 15km northeast of the Bronzewing gold mine in Western Australia.

The first phase will consist of five diamond holes at the November Rain target area and the Dusty nickel-gold prospect.

This will be followed by a reverse circulation program that is currently being planned.

Superior Resources (ASX:SPQ) has unveiled a new work program to test the potential for an underground high-grade ore shoot feeder system at the Steam Engine resource.

Surface soil geochemistry indicates that the Eastern Ridge Lode Zone is potentially up to 4km long.

The company plans to test the underground potential with a three-hole diamond drilling program.

This will be done in conjunction with a scoping study that is currently underway on the drilled portion of known lodes and will include about 2,500m of drilling that is planned to start in July.

Vango Mining (ASX:VAN) is also moving to start drilling targeting high-grade resource growth at its Marymia project after raising $17.4m.

This includes firm commitments to raise $15m through a share placement priced at 8c per share and the conversion of $2.4m in drawn debt facilities into shares at the same price.

Proceeds will be used to fund drill testing of larger-scale Plutonic-type targets and to carry out technical and economic studies for mining project development.

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