Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
After hitting an all-time high of more than $2,150 per ounce last week, some investors and analysts believe that precious metal prices may retreat a bit this week.
However, April gold futures contract just hit a new high of more than $2,200 on Monday (11 March), indicating that the bullish momentum has not faded.
Commodity analysts at Société Générale noted that a record $11.3 billion has flowed into the gold market since gold prices broke through $2,050 per ounce. The previous largest inflow was in 2019, when $9.1bn flowed in, the analysts wrote in a report.
Nicky Shiels, head of metals strategy at MKS PAMPs, noted in a report on Friday (8 March) that while gold prices have been rising for some time, it still came earlier than most analysts expected, with relentless buying making this steady breakout very different from previous ones.
Analysts at Société Générale went on to note that despite the low demand in the market, there is still a lot of potential money on the sidelines, waiting for the right momentum. The big concern for investors is how much more upward momentum does gold have?
Analysts at TD Securities said on Friday that they had taken profits on long gold futures positions that had been accumulated recently, and that gold prices were expected to remain high in the near term, but that volatility was set to rise significantly. Ole Hansen, head of commodities strategy at Saxo Bank, said that while he is bullish on gold, investors should be sensitive to the market’s current speculative position building.
A number of analysts believe that if the bullish momentum in the gold market is to continue, investors need to see the demand in the gold market again. While speculators are flocking to the precious metals market, investors are continuing to flee gold-backed exchange-traded funds (ETFs), which is a problem that needs to be addressed as gold prices rise.
According to the latest data from the US Commodity Futures Trading Commission, the Commitment of Traders Position Report for the week ending 5 March showed that money managers increased their total speculative long position in Comex gold futures by 41,221 contracts to a total of 145,106.
Meanwhile, short positions decreased by 12,389 contracts to a total of 35,343. The net long position in the gold market now stands at 109,763 contracts, an increase of 95 per cent from last week.
