Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
After multiple attempts to surpass $2,500 per ounce this year, gold futures prices rose by over 3% last week, breaking through the $2,600 per ounce mark to hit a new all-time high. Silver saw even larger gains, closing up nearly 10% last week to over $31. The catalyst for this surge in precious metals prices is largely the expectation of interest rate cuts by the Federal Reserve. Notably, as gold prices continue to reach new highs, several institutions are setting their target price at $3,000.
Spot gold reached a record high of $2,572.81 per ounce last Friday, marking an increase of over 24% this year and potentially achieving its strongest annual performance since 2020.
According to the CME FedWatch Tool, investors estimate a 55% probability of a 25 basis point rate cut and a 45% probability of a 50 basis point cut. If upcoming U.S. economic data suggests recession risks and a weakened job market, it would increase the likelihood of a 50 basis point Fed rate cut, potentially bringing gold prices to $3,000 sooner.
With the U.S. elections approaching, potential market volatility might also drive investors towards safe-haven gold.
From a technical analysis perspective, the gold price chart over the past 50 years suggests that by 2024, gold completed a decade-long consolidation, indicating a new bull market. Specifically, since March 2024, gold prices hit historical highs and broke through a 10-year cup-and-handle pattern. Following the upward trend since 2023, gold prices are expected to reach $3,000 between February and August 2026.
However, investment banks and analysts seem more optimistic. Aakash Doshi, head of North American commodities at Citi Research, predicts that due to U.S. rate cuts, strong demand for gold ETFs, and robust off-exchange physical demand, gold could reach $2,600 per ounce by the end of 2024 and hit $3,000 by mid-2025.
Goldman Sachs has lowered its forecasts for key industrial commodities like copper in its latest report but remains bullish on gold, which it sees as the top tool for hedging geopolitical and financial risks. Consequently, the bank maintains its 2025 target price of $2,700 per ounce.
Macquarie also raised its gold price expectations this week, now forecasting a cyclical peak quarterly average of $2,600 per ounce in the first quarter of next year, with the possibility of surging to $3,000.
Gold prices are supported by the following fundamentals:
