Gold's small stumble is just a 'blip', analysts say

Gold has slipped more than 4 per cent to $US1,575.20 ($2505.34) per ounce as investors sell off the safe haven commodity to offset losses elsewhere.

At least part of this is due to the need to meet ‘margin calls’ in the stock market, FX Empire says. A margin call happens when the value of an investor’s margin account — one that includes stocks bought with borrowed money — falls below a certain threshold.

But the fall in gold may be just a blip. Gold Newsletter editor Brian Lundin believes that if gold is being sold to raise cash in an emergency, then it is doing its job as a safe haven.

“Gold really shines in the aftermath of a liquidity event like this, when the central bank remedial efforts significantly loosen monetary policy and expand the money supply,” he said.

“We saw very similar market reactions during the 2008 crisis, and gold outperformed in the months after the initial turmoil.

“This is a time when we need to just hunker down and weather the storm, while keeping an eye on the longer-term implications.”

READ: Gold Digger — The only thing glittering in this beat up market

SMALL CAP FOCUS:

Spectrum Metals (ASX:SPX) — the subject of recent $208m takeover bid by producer Ramelius Resources (ASX:RMS) — has intersected further high-grade gold at both the Magenta prospect and the new, early stage Golden Hinde target.

Drilling at Magenta returned top hits of 3m grading 9.62 grams per tonne (g/t) gold from a depth of 226m and 2m at 13g/t gold from 226m.

Results above 5g/t gold are generally considered to be high-grade.

Further drilling will be carried out at Magenta to extend the strike length of the gold mineralisation.

Meanwhile, a single hole at Golden Hinde has returned a 1m intersection grading 54.9g/t gold with the company planning follow-up drilling to determine the extent of this new discovery.

Artemis Resources (ASX:ARV) is pruning its portfolio with the sale of its non-core 47 Patch and Purdy’s Reward conglomerate gold projects in the Pilbara to Canada’s Novo Resources Corp for $4.8m in cash and shares.

This will allow the company to focus on its Carlow Castle and Patersons Central projects.

Once upon a time, investor money was swarming all over conglomerate gold explorers in the Pilbara and companies like Artemis were much-loved by the market.

In fact, it was Artemis and Canadian partner Novo which probably sparked the Pilbara gold rush after uncovering “watermelon seed nuggets” south of Karratha in July 2017.

Conglomerate gold has proved a complete fizzer so far, because drilling the nuggs and delineating resources is proving tougher than originally thought. Artemis’ share price has fallen 95 per cent from a November 2017 peak of ~52c to the current 2.5c.

Nexus Minerals (ASX:NXM) has received a positive scoping study from mining consultants CoverdaleCo for its Nexus Pinnacles JV project in WA that paves the way for the start of a more detailed feasibility study.

The scoping study identified a pathway to monetise the resource through the development of an open cut followed by an underground mining operation.

Additionally, the project benefits from a pre-existing ore sales agreement with Saracen Mineral Holdings (ASX:SAR). Discussions are now underway to secure funding for the feasibility study through to aimed production.

Over in Argentina, E2 Metals (ASX:E2M) has started drilling at the Mia and Patricia prospects to test two high-grade veins with visible gold.

Surface assays had previously returned 43.9g/t gold and 1,128g/t silver at Mia, and 40.4g/t gold and 262gt silver at Patricia.

The company has also completed a geophysical survey which shows that both prospects correspond with a strong chargeability corridor that extends for a 1.7km strike length to the Florencia prospect.

This suggests that all three prospects are located within a single mineralised trend.