• Gold’s price facing headwinds from stronger US dollar, rising US bond yields
  • ‘Bond yields cannot go higher forever, and once the trend reverses, gold will do well’
  • ASX Gold Stocks Guide: Everything you need to know


At the start of the trading week the price of gold was $US1,732 per ounce ($2,270/ounce) and its progress has been slowed by rising yields on government-issued bonds.

Gold has recently struggled against a stronger US dollar which was trading at a five-month high in relation to a basket of other global currencies including the Euro and UK pound.

Federal Reserve chairman Jerome Powell created some waves in precious metals markets with a speech last week in which he said, “crypto is a substitute for gold, not the US dollar”.

“Crypto assets are highly volatile and therefore not useful as a store of value,” Powell told a meeting of the Bank for International Settlements.

“It is a speculative asset that is essentially a substitute for gold rather than for the dollar,” he added.


Bond yields and US dollar weigh on gold price

The US central bank is experimenting with a digital currency, but Powell stressed it was not in a hurry to rush its development as there were still issues to address such as cybersecurity.

“We do not want to destabilise the two-tiered system between the central bank and private banks and private banks and the public,” Powell said.

In the near term, market analysts suggest gold will face headwinds from a stronger US currency and higher yields on government bonds.

“Bond yields cannot go higher forever, and once the trend reverses, gold will do well,” Blue Lines Futures chief market strategist, Phillip Streible, told Kitco news.

US Treasury 10-year bonds were yielding 1.66 per cent Monday, after hitting a one-year high of 1.7 per cent a week ago.


Ausgold prepares for resource upgrade

Ausgold (ASX:AUC) has completed an extensive drilling program of 31,050m for its Katanning gold project in WA that paves the way for a resources upgrade.

New significant results include 4m at 5.83 grams per tonne (g/t) gold from 160m at Ausgold’s Jinkas South lode which has identified a new area of gold mineralisation.

The new resource estimate for the project will cover its 4.5km-long strike in its central zone.

“Our improved geological model led to the discovery of the Jinkas South lode where we have just completed a substantial 30,000m program of new drilling, focused on key resource areas within the central zone,” managing director, Matthew Greentree, said.


Firefinch intersects high grades at Mali project

Firefinch (ASX:FFX) said it has intersected high grades of gold at its Viper deposit within its Morila gold project that is along strike from the previously mined Viper pit.

The intercepts come from a previously undrilled high-grade lode discovered at the southern end of the Viper pit that returned a hit of 5m at 17.7 g/t gold from 37m.

“Viper can provide early feed to the Morila plant and it is very encouraging to see high grades being intersected below and along strike from the previously mined pit,” executive chairman, Alistair Cowden, said.

The Morila gold project is hosted in the west African country of Mali.


Native Mineral Resources finds visible gold

Native Mineral Resources (ASX:NMR) has obtained above-expectation assay results from drilling at its Music Well gold project in WA’s Eastern goldfields region.

Visible gold was obtained from all 14 large samples collected in recent sampling at Music Well, confirming that gold can be recovered using gravity separation techniques.

One rock chip sample returned more than 100 grams per tonne (g/t) gold, which equates to more than three ounces of gold per ton, and seven samples had more than 2 g/t gold.

“These initial sampling results from Music Well have exceeded our expectations, and indicate the strong potential for a much larger gold bearing structure to be hosted within the project area,” managing director, Blake Cannavo, said.

ASX share prices for Ausgold (ASX:AUC), Firefinch (ASX:FFX), Native Mineral Resources (ASX:NMR)