Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
The price of gold hit a record high of $2,142.30 per ounce on Tuesday (5 March) as the 2024 PDAC (Prospectors and Developers Association) conference was held in Toronto. Before noon of Wednesday, the spot gold price touched another high of $2,150 per ounce, eventually closing at $2,148.90 per ounce, up 0.84% on the day.
A number of factors drove the gold price higher, including expectations of a June interest rate cut by the Federal Reserve, strong purchases by central banks around the world, an accelerating consumer debt crisis in the U.S., a flurry of geopolitical events, and a rising risk of a pullback in equity markets.
Brien Lundin, editor-in-chief of Gold Newsletter, said there is no doubt that the Fed will have to make adjustments this year because the cost of servicing federal debt is high at current interest rate levels. When the Fed has to shift from raising rates to cutting them, other central banks will follow, and when that happens, gold will outperform.
Gold stocks will once again be at the centre of investor attention as the price of gold hits record highs. Unfortunately, the stocks of gold explorers and producers, which have directly benefited from the rise in the price of gold, are far from their all-time highs.
Rick Rule, CEO of Rule Investment Media, told Investing News Network that he has never seen such a disconnect between the gold price and gold stocks in his career. “The fact is, no one wants to own gold stocks.”
Lobo Tiggre, CEO of IndependentSpeculator.com, expressed the same sentiment at the PDAC conference, pointing out that gold stocks are still not getting any traction and that this is a huge opportunity.
Regarding when to buy gold stocks, market experts suggest starting to build positions before the Fed’s first interest rate cut. Lundin said that undervalued gold stocks can now be bought at very cheap prices. He believes that gold investors will start making moves when the price of gold breaks above $2,150 and shows a successful breakout on technical charts.
He told INN on the sidelines of the PDAC conference that a breakout of the gold price above $2,150 will attract generalist money into the precious metals space, which will drive the price of gold to continue to rise, which in turn will attract a steady flow of money and ultimately drive a significant rally in mining stocks.
