Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
The price of gold hit record highs numerous times in 2024 until investors sold off after U.S. election earlier this month, triggering the price to fall back to near $2,540 an ounce for a time.
Despite this, investment banks led by Goldman Sachs continue to be bullish on the precious metal. Goldman Sachs said that gold prices would hit an all-time high of $3,000 per ounce in 2025.
Meanwhile, analysts at UBS also released a report this week saying that the price of gold will rise to $2,900 per ounce by the end of next year
However, according to Matthew Jones, a precious metals analyst at Solomon Global, the price of gold could hit an all-time high of more than 2,800 before Christmas in 2024.
Jones says the ongoing conflict between Russia and Ukraine has become one of the most intense and geopolitically significant confrontations of the 21st century. The West, led by the U.S. and its NATO allies, has provided significant military assistance to Ukraine, and has stepped up its support in recent days.
If the conflict between NATO and Russia escalates beyond Ukraine’s borders, a world war involving Russia, the U.S., and NATO could propel the price of gold to all time highs.
Jones explains that in the face of greater geopolitical risk, investors are bound to flock to gold, leading to increased demand and higher prices. Global conflict could destabilise financial markets, leading to a sell-off in equities and risky assets. As investment demand increase, the gold market could see large inflows, further pushing up the prices.
Jones points out that supply chain disruptions, energy crises and widespread economic sanctions are common in times of heightened conflict, all of which could be favourable to the price of gold In addition, governments involved in wars often require large amounts of military spending, leading to an increase in national debt and money printing, which can weaken fiat currencies such as the US dollar or the euro, making gold more attractive as a store of value.
A widespread war could also undermine the global trading system and reduce trust in the international commercial and financial system. Under such a scenario, central banks and investors might turn to gold as a universally recognised tangible asset.
