Recently, Tara Christie, President and CEO of Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF), was interviewed by METALS 100 detailing the latest resource updates for the AurMac gold project and this year’s exploration plans. Christie also stated that although the current gold stock prices are lagging behind the price of gold, once the revaluation begins, small companies like Banyan Gold may lag behind large producers, but have greater revaluation potential.
Gold prices have repeatedly hit historical highs this week. Stimulated by the expectation of a Fed rate cut, gold prices continued to rise on Thursday, with spot gold prices hitting a record high of $2164.09 per ounce at one point during the day, while US gold futures prices rose 0.2% to $2162.00.
Compared to many other metals, even other precious metals like silver, gold appears to be “useless”. If we exclude jewelry and only consider industrial uses, this characteristic becomes even more apparent.
According to the latest data from the World Gold Council (WGC), global gold demand in 2023 (including over-the-counter trading) reached a record 4899 tonnes, with 2168 tonnes for jewelry manufacturing, 1037 tonnes for central banks and other institutions, and 1190 tonnes for gold bars and coins, while only 298 tonnes were used in technology.
Gold has four main drivers: monetary, financial, commodity, and hedging attributes.
One of the major values of gold lies in its “uselessness”, or rather, its monetary attribute. Throughout history, each major bull market in gold has been associated with the strengthening of gold’s monetary attribute, reflecting the shifting strengths of various forces in the international monetary system. In the long term, the world is entering a process of “de-dollarization”, manifested in the decline of US dollar foreign exchange reserves and the rise of gold reserves.
Many analysts have pointed out that, under the pressure of various unfavorable factors, the ability of gold to hold the $2000 integer level is attributed to the endless demand from central banks, especially those in emerging markets. The latest data shows that in February 2024, the People’s Bank of China once again purchased 12 tonnes of gold, increasing its gold reserves to 2257 tonnes, marking continuous growth for the 16th consecutive month. Since November 2022, China has purchased 297 tonnes of gold.
Central banks buy gold for reasons such as diversifying reserves, improving balance sheets, and obtaining liquidity from gold assets. Additionally, the World Gold Council also points out that central banks hold gold for two key reasons: its excellent performance in times of crisis and its important role as a long-term store of value. In recent years, as the trend of deglobalization intensifies, the status of the US dollar as the “world currency” has been challenged, once again bringing gold to the attention of various countries.
