Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
The price of gold reached $2,700 an ounce on Tuesday, buoyed by news that China’s central bank has resumed gold purchases after a six-month pause.
Analysts at Heraeus Precious Metals believe that major central banks around the world have entered a cycle of interest rate cuts, and the prospect of the U.S. economy slipping into a recession in 2025 could mean more interest rate cuts, implying the likelihood of a weakening U.S. dollar and a fall in real interest rates, providing a bullish environment for gold prices.
Max Layton, global head of commodities research at Citibank, has just said that the outlook for oil prices next year has become more pessimistic with Trump in office, but the key drivers of gold’s rally are still in place, and the price is expected to continue to rise through 2025.
Layton noted that investors already have some confidence in the fundamental drivers of this bull market in the precious metal – investment from central banks, also from wealthy OTC investors, and more generally from investors concerned about high US interest rates, and high US debt levels.
He explained that the US economy has been slowing down for two or two and a half years, the labour market has been slowing down for two and a half years, and real interest rates are still at 15-year highs. Investors are worried about this. Until these issues go away, there will be a lot of gold investment buying as a hedge, including central bank buying, which won’t go away anytime soon.
Heraeus analysts noted in a report that China and India will provide a solid foundation for gold demand in 2025 if the Chinese government’s stimulus measures boost the economy. Meanwhile, the potential for more uncertainty over trade and tariffs following Trump’s return to the White House could also support gold prices.
Gold has surged more than 29 per cent this year and is on track for its best annual performance since 2010, driven by central bank interest rate cuts and rising geopolitical tensions.
Analysts added that the current gold-silver ratio suggests silver is undervalued compared to gold, which typically outperforms gold in the later stages of a bull market, and are bullish on silver prices climbing as high as $40 an ounce in 2025. Platinum prices are expected to remain between $850 and $1,220 an ounce in 2025, and palladium between $800 and $1,200.
