Could gold surge in 2024? Our expert sees new records on the horizon.
The Investing News Network spoke with analysts and market insiders to get their forecasts as well as top trends and stocks Australian investors need to know about in order to not miss the gold rush of 2024!
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So if you are looking for a way to diversify your portfolio amidst political and financial instability, this is the place to start. Right now.
Gold remained rangebound for the first two months of the year, staying above the US$2,000 level until it briefly broke through support in the middle of February, falling to its quarterly low of US$1,991.98 on February 13.
Following this low, gold began a slow climb toward the start of March, ultimately soaring to a quarterly high of US$2,251.37 on March 31. Gold has continued to move since then, briefly passing US$2,400 on April 12.
The first eight weeks of the year saw key gold market trends extend from 2023.
“One area of note in the ETF landscape is the Asian region. The Asian-domiciled ETFs, while smaller than the US and European markets, are positive in terms of net flows year-to-date (were positive in 2023 as well). This amplifies the importance of looking into the detail as it relates to gold investment to get a complete picture,” he said.
Other notable central bank buyers during the first two months of the year included Turkey, which added 16 MT of gold, Kazakhstan which purchased 12 MT, and India, which increased its reserves by 13 MT.
“With ETFs still seeing outflows, I think there’s a new buyer in the market, one that’s also interested in physical gold, not paper substitutes. This could be sovereign funds joining central banks, other institutions or other deep-pocketed players who don’t really care that much about the price, deciding that the time has come to hedge with gold,” he said.
By the middle of March, gold had set record highs and was pushing against resistance at the US$2,200 mark.
Gold price, Q1 2024.
More broadly, Cavatoni sees conditions setting up for broader global interest in gold.
“As central banks continue to be significant buyers and geopolitical risks and global uncertainties drive investors towards the perceived safety of gold, the current environment underscores gold’s importance as a strategic asset for portfolio diversification and risk mitigation. Therefore, while there may have been a perception of western disinterest in gold, recent developments indicate a sustained and broad-based demand for the precious metal,” Cavatoni said.
Gold stocks started to gain some momentum in March, but have been slow to take off.
Tiggre attributed this lag to a misreading by investors who had expected the gold price to retreat from all-time highs.
“It’s my view that the ‘smart money’ in the west thought gold had spiked and its next big move would be down, so gold stocks were ‘leading’ gold lower. However, it’s increasingly clear that that call was wrong, and I expect to see the stocks outperform this year when those who got it wrong realize their mistake,” he said.
“I’ve never seen this much of a disconnect before while the gold price is breaking out,” he said. “I’ve seen … this much of a severe deficit twice before, when the gold price was threatening to break down to a much lower level.”
The last two times this happened, there were huge moves for juniors within six months of the start of the reversion.
While the second quarter of the year is just beginning, the yellow metal has already made some major gains. Gold continues to make moves and has even traded above US$2,400 for the first time ever.
While gold is traditionally viewed as a safe haven during times of geopolitical tension, Tiggre said the ongoing nature of these conflicts has caused an evolution of sorts for investors. “Unless one of these conflicts spreads, I don’t think either will have much impact on gold. They are part of the new normal background level of political radiation,” he said.
For Tiggre, a key point to watch is continued buying of gold from outside of the sphere of influence, where he thinks there is a push to move away from the US dollar. He also expects a recession, which he believes will move gold higher.
For his part, Cavatoni believes continued uncertainty around geopolitical events and the macroeconomic landscape may be a tipping point for western investors. “Will those Fed rate cuts be enough to move investors back into the gold? We believe this will serve as a catalyst to bring back the western investor, even at these high prices,” he said.
If gold continues to rise in Q2, it could prove a critical time for the yellow metal and gold stocks. Producers are likely to move first, followed by companies with advanced-stage projects and lastly juniors. However, it’s important for investors to remember with rate cuts uncertain, the momentum in the market now could just as easily shift into decline.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Affiliate Disclosure: The Investing News Network may earn commission from qualifying purchases or actions made through the links or advertisements on this page.
At the beginning of April, gold was at US$2,250, finding support from investors betting on a June interest rate cut from the US Federal Reserve, as well as strong central bank buying. The precious metal found further support in May as geopolitical and sovereign debt concerns weighed on investors in China and the Middle East.
On May 20, gold hit US$2,450.05, its highest price ever. Read on for more on how it got there and what’s next.
The biggest story for gold in Q2 was its price activity. As mentioned, strong momentum carried over from March, allowing the yellow metal to break through US$2,400 in mid-April. Its price gains were influenced by various factors, including continued buying from central banks, strong demand from Chinese retail investors and better sentiment from western investors, which helped to stem flows out of gold exchange-traded funds (ETFs).
“All of a sudden, gold was off to the races. It jumped so high that all of a sudden you had some short covering that needed to happen then as well. So you had short covering, which means they’re buying. And then you had momentum chasers and traders jumping all in. That was a pretty good spike … that’s what kind of started all of this,” Clark said.
Gold price, Q2 2024.
This uncertainty has created resistance for gold, which finished Q2 at the US$2,325 level.
On the flip side, the worst-performing ETFs for the quarter in terms of flows were primarily from Europe, with German and UK funds holding six of the slots, with two Swiss, one French and one American fund rounding out the bottom 10.
For the most part, gold stocks haven’t yet reacted to the elevated gold price.
“The central banks have been buyers of gold, but they aren’t buyers of gold shares. So it makes perfect sense that because the audience for gold, at least temporarily, has changed, that this dichotomy exists,” he said.
Clark also noted that the juniors that aren’t in the GDXJ have been underperforming, but given how well gold has performed it’s just a matter of time. “I think the fuse has been lit, because once gold starts to move the money will move down into the producers, then developers and then juniors,” he said.
“With the price of gold above US$2,000 an ounce, people are looking at junior explorers and saying, ‘What have they found and could that really grow?’ You’re watching the high-cost producers suddenly start performing because now they’re moving into the positive territory in their earnings, and there are some M&As still going around as people say it’s faster and possibly cheaper to buy the ounces than to drill and wait for the results,” he said.
With the price of gold changing so fast, Clark has had to make some adjustments to his forecast for the rest of the year. For him, the next level to watch is US$2,500, and he is confident it will get there this year.
“We had a 38 percent rise in the gold price, in this upcycle, but the average upcycle is much higher, and if this upcycle were to end today it would be the lowest in history,” Clark said.
Overall, experts believe a great deal of potential has yet to be unlocked in the gold price as well as gold companies. The current market may provide opportunities for investors who have been waiting on the sidelines to invest in producers or ETFs, and — depending on risk appetite — chances to get exposure to well-positioned juniors.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Speaking to the Investing News Network, Brien Lundin, editor of Gold Newsletter, explained what factors kicked off gold’s price run earlier in 2024, and what could drive it even higher as the year continues.
He also shared his thoughts on why gold stocks haven’t yet moved as much as investors might have hoped.
“When you would have expected (gold) to maybe drop a couple hundred dollars if the (US Federal Reserve) pivot was being postponed — instead we’re about US$300 higher,” he said on the sidelines of the Rule Symposium.
“So we’re going to hopefully take off with that big new factor from a much higher price level.”
Watch the interview for more from Lundin on gold and gold stocks, as well as silver.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Affiliate Disclosure: The Investing News Network may earn commission from qualifying purchases or actions made through the links or advertisements on this page.
Peter Grandich of Peter Grandich & Co. shared his updated thoughts on the resource sector now that the year is more than halfway through, honing in on gold’s price drivers and path forward in 2024 and beyond.
Notably, he sees much higher price levels for the yellow metal in the years to come.
“I was always the guy who stood at a show and said, ‘Yes, I’m bullish on gold, but to talk about US$5,000 (per ounce) gold or US$10,000 gold — I think that’s foolish, you shouldn’t,'” he said during the interview. “It’s not foolish anymore. There’s legitimate possibilities for those type of numbers to be reached, certainly within a matter of a couple of years.”
Watch the interview above for more from Grandich on those topics.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Speaking to the Investing News Network, Adrian Day, president of Adrian Day Asset Management, explained what factors are behind gold’s price rise and why gold stocks haven’t performed as well as might be expected.
He also shared his thoughts on when gold equities will finally move higher.
“I think when companies start to report their second quarter earnings later this month, we’re going to start to see some very attractive cashflow numbers — better than the first quarter, and better than the year-ago comparisons,” Day said.
“I’ve got to think that investors, when they see two back-to-back quarters of strong cashflow numbers, are going to start to look at these companies,” he added from the sidelines of the recent Rule Symposium.
Watch the interview above for more of Day’s thoughts on what’s next for gold and gold stocks.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Affiliate Disclosure: The Investing News Network may earn commission from qualifying purchases or actions made through the links or advertisements on this page.
Gold has set new price highs in nearly every currency over the past year, and the yellow metal smashed through Australian records on April 22, when it reached AU$3,638.01 per ounce.
Its meteoric gains this year have come on the back of several factors, including continued purchases by central banks, an improving economic situation in the US and ongoing geopolitical instability.
Year-to-date gain: 326.47 percent; market cap: AU$67.74 million; share price: AU$0.29
Australian Gold and Copper is an exploration company that has spent 2024 focused on advancing the Achilles gold-silver discovery at its South Cobar project in New South Wales, Australia.
In its news release, the company said it would be starting a follow-up drill program with up to 20 reverse-circulation holes and 10 diamond core holes with the intent of extending the strike length and depth of the deposit.
Shares of the firm reached a year-to-date high of AU$0.56 on May 22 alongside a rally in the gold price.
Year-to-date gain: 123.81 percent; market cap: AU$279.17 million; share price: AU$0.05
WIA Gold is an exploration company focused on developing projects in Africa.
The company’s primary goal is to advance the Kokoseb deposit at its Damaran gold project. Kokoseb is located on WIA’s Okombahe exploration licence, which consists of 12 tenements across a 2,700 square kilometre area within the Damaran Belt in Northwest Namibia. WIA Gold holds an 80 percent stake in the exploration licence, with the remaining 20 percent being held by Namibian state-owned mining company Epangelo.
Shares of WIA reached a quarterly high of AU$0.125 on May 21, buoyed by the gold price.
Year-to-date gain: 75.38 percent; market cap: AU$432.45 million; share price: AU$2.20
Shares of Southern Cross reached a quarterly high of AU$3.21 on May 9.
Year-to-date gain: 74.19 percent; market cap: AU$936.05 million; share price: AU$0.90
Spartan Resources is a gold exploration and development company whose core assets are located in Western Australia. Its flagship operation, the Dalgaranga gold mine, produced 71,153 ounces of the metal in 2022 before being placed on care and maintenance as low grades reduced the asset’s viability.
Spartan has since turned its focus to increasing grades and expanding Dalgaranga’s resource estimate. It has largely focused on the Never Never deposit, which it discovered in 2022. In December 2023, the company said it had increased Dalgaranga’s resource by 43 percent, reporting that Never Never holds 5.16 million tonnes at 5.74 g/t gold for 952,900 ounces, while Gilbey’s Complex has 15.99 million tonnes at 1.45 g/t gold for 739,800 ounces.
The company said Pepper has similar mineralisation and grades to Never Never, with one assay showing 15.86 g/t gold over 17.52 metres, which includes an intersection of 27.89 g/t gold over 9.22 metres.
Shares of Spartan reached a year-to-date high of AU$0.915 on June 24.
Year-to-date gain: 72.73 percent; market cap: AU$312.94 million; share price: AU$0.19
Aurelia Metals is a mining and exploration company with two operating gold mines in New South Wales, Australia.
Aurelia’s Dargues mine is in the Southern Tablelands region and hosts an underground mine as well as crushing, ball milling, flotation and dewatering circuits. During the same quarter, Dargues processed 88,000 tonnes of ore for gold production of 9,205 ounces. The mine has produced 26,621 ounces of gold over the last three quarters.
Aurelia has tracked higher along with the price of gold, reaching a year-to-date high of AU$0.21 on May 20.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Spartan Resources is a client of the Investing News Network. This article is not paid-for content.
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