Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
On Tuesday, gold prices reached a new all-time high, marking the fourth consecutive day of increases. October gold futures closed up 0.9% at $2,768.40 per ounce, with a 2% increase over the past four sessions. October silver futures also rose 1.3%, reaching $34.269 per ounce, the second-highest settlement this year.
Despite rising U.S. Treasury yields and a slight easing of geopolitical tensions, gold remains strong. With a year-to-date gain of approximately 34%, it has become one of the best-performing assets of 2024.
Analysts suggest that the catalysts for the rise in gold prices are primarily the uncertainty surrounding the U.S. presidential election and expectations of a Federal Reserve interest rate cut. The Fed’s next policy meeting is set for November 7, with markets currently pricing in a 98% chance of a 25-basis-point rate cut. However，the recently surging “Trump trade” is particularly noteworthy.
Previous surveys indicated that, in the event of a Trump election victory, those favoring gold as a safe-haven asset outnumbered those supporting the dollar by two to one. The underlying logic is that Trump’s policies of corporate tax cuts, tariff hikes, and deregulation might stimulate economic growth but could also drive up inflation, weakening the dollar and supporting gold prices.
Historical data shows that during Trump’s four-year presidency (January 2017 – January 2021), the dollar fell over 10%, while spot gold surged more than 50%.
Dilin Wu, a strategist at Pepperstone, indicates that the upward momentum in gold is closely linked to the Trump trade. Wu highlights concerns about the U.S. fiscal situation, noting a deficit of $1.8 trillion for the fiscal year ending in September. Both presidential candidates advocate expansionary fiscal policies, with Trump being particularly aggressive. If Trump wins, U.S. debt could skyrocket by $7.5 trillion over the next decade, significantly more than the $3.5 trillion projected under a potential Harris administration.
Considering the “Trump trade,” Wu suggests that the path of least resistance for gold is upward.
Since 1970, public debt in the U.S. has increased every year except for 2000, growing from about $370 million in 1970 to a record high of $31.4 trillion in 2023. Over the past 53 years, gold prices and total U.S. debt have grown almost in tandem. As U.S. debt increases, gold prices tend to rise.
Additionally, Peter Cardillo from Spartan Capital notes that China is considering increasing its debt by over $1.4 trillion in the next five years, further boosting gold prices. He predicts that gold may reach as high as $2,850 per ounce in the short term. Han Tan, chief market analyst at Exinity Group, also suggests that as long as U.S. election risks continue to weigh on market sentiment and Fed rate cut expectations remain in place, gold prices should maintain their upward trajectory, possibly testing $2,800.
