Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
Benefiting from rising geopolitical uncertainty, the approaching United States elections and the Federal Reserve’s new easing cycle, the price of gold once again hit a new all-time high above $2,700 this week.
The precious metals market is experiencing strong upward momentum, driven by a new round of ‘fear of missing out’ (FOMO) trading by investors.
December Gold Futures on Comex last traded at $2,732.20 an ounce on Friday (18 October), up nearly 1% on the day and gained 2% on the week.
Naeem Aslam, chief investment officer at Zaye Capital Markets, pointed out that while the momentum to go long on gold remains strong, this sharp rise is largely sentiment-driven, and any shift in the Federal Reserve’s attitude or profit-taking could trigger a correction.
He added that the higher the rally without retracement, the more vulnerable it will be. It makes sense for investors to remain cautiously optimistic at this point, as overbought conditions could quickly reverse.
While gold continues to be in the spotlight, some analysts are advising investors to keep an eye on silver, which is still quite a long way from rising to all-time highs compared to gold, which is already at an all-time high.
Although the latest gold/silver ratio has plunged below 82 points to a two-week low, analysts point out that the ratio is still at relatively high levels, with this year’s low being 72 points at the end of May.
The December silver futures contract closed today at $33.414 an ounce, up 5 per cent.
Tavi Costa, Partner and Macro Strategist at Crescat Capital, said in a post on social media that silver’s rally has just begun. And it has formed a full cup-and-handle pattern on the K-line chart, implying that the market will continue to rise.
With little in the way of important economic data next week, analysts expect the precious metals market to continue to focus on broader trends, especially geopolitical uncertainty.
Daniel Ghali, Senior Commodity Strategist at TD Securities, noted that the precious metals market faces rising risks, and much of the current momentum seems to be coming from the over-the-counter (OTC) market, which is difficult to track. He added that the rally is expected to be sustainable but challenging at the same time.
