Gold takes a breather as UBS raises ’21 price forecast to $US2,100/oz
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The gold price was in neutral mode Monday, trading at $US1,949 per ounce ($2,669/oz) and similar to Friday’s market close, as traders waited for fresh news to drive the market’s direction.
Last week’s Federal Reserve meeting gave some support to gold prices, as bank chairman Jerome Powell said US interest rates would stay on hold at close to zero through to 2023, analysts said.
“There are certainly sufficient things in the world to support gold, not least of which is the extreme easy [monetary] policies being pursued by central banks around the world,” Adrian Day, chief executive of Adrian Day Asset Management told Kitco news.
Meanwhile, Swiss bank UBS has raised its price forecast for gold in 2021 to $US2,100/oz from $US1,850/oz, on global economic uncertainty, it said.
“From a technical perspective, it is hard to get excited about gold at the moment as it continues to chop between $US1,900 and $US2,000, and it has not seen the extremes in a month,” Bannockburn Global Forex chief market strategist, Marc Chandler, told Kitco.
The upcoming US presidential election in November is likely to provide some market uncertainty for gold prices, analysts said.
The ASX has seen a smattering of gold IPOs in recent weeks, adding to the market’s fever pitch.
Gold explorer Calidus Resources (ASX:CAI) has agreed to buy the high-grade Blue Spec gold-antimony project in WA for $19.5m in cash from Toronto-listed Novo Resources.
Calidus said the purchase demonstrates its commitment to establish a new regional gold production hub in the East Pilbara goldfield.
“With early construction works now underway at Warrawoona and main project construction commencement on track for early next year, we will advance Blue Spec as rapidly as possible,” managing director, Dave Reeves, said.
Blue Spec has a resource of 415,000 tonnes at 16.3 grams per tonne gold for 219,000 ounces, and offers the potential to grow production at its Warrawoona gold project, also in WA’s Pilbara region.
The Blue Spec project has historical production of 60,000oz at 25g/t gold, and would offer operational and capital cost synergies with Warrawoona which has a treatment plant.
3D Resources (ASX:DDD) has started upgrade work to its Adelong gold processing plant with the aim of doubling production capacity and adding a pre-concentration stage.
The existing plant produces high-grade gravity concentrate and studies have indicated that gold is recoverable at a coarse grind size, which a pre-concentration stage would help with.
The company acquired the Adelong Goldfield projects covering 70 sq km in southern NSW in May, and the Adelong goldfield has historical production of 800,000oz of gold.
Thomson Resources (ASX:TMZ) has submitted applications for four new exploration licences in the Lachlan Fold Belt gold exploration hotspot in NSW for an additional 1,180 sq km.
The company has three existing gold projects in NSW, Lachlan Fold Belt, Hortons in the New England Fold Belt and Chillagoe covering 764 sq km in NSW.
“While Thomson continues to evaluate the acquisition of new projects, these exploration licence applications demonstrate that there is plenty of good ground out there for us to pick up and we will continue to do so where they enhance our projects,” chairman David Williams said.