Pasofino Gold Limited (TSXV: VEIN)
Re-defining the Dugbe Gold Project
The price of gold has been on a rollercoaster ride this week, surging nearly 6% in the first two trading sessions, but giving back most of the gains afterwards. On Friday (9 May 2025), spot gold closed at $3,336.84 per ounce, up 3% from a week ago.
James Stanley, senior market strategist at Forex.com, said that gold’s move was relatively neutral this week, after the Federal Reserve reiterated that it was in no hurry to cut interest rates as the U.S. economy remains relatively stable and inflation risks remain high.
Although the central bank is still expected to cut interest rates in the summer, but the bullish momentum has turned to ‘wait and see’ mode.
According to Naeem Aslam, chief investment officer at Zaye Capital Markets, in the short term, the likelihood of a lower gold price has risen, but it is expected that investors will continue to buy the dip. And the long-term trend remains upwards, with gold prices set to break above $3,500 as geopolitical tensions remain.
Analysts generally agree that gold price’s sensitivity to this weekend’s U.S.-China trade talks is on the rise, and this could be the biggest risk to gold in the near future, with investors increasingly optimistic that U.S. President Donald Trump and his administration will finally end the trade war with China. Trump himself has said he believes there will be tangible progress in trade talks with China by the end of the week.
The White House stated on Thursday that the Trump administration had reached an agreement with the United Kingdom. Though the U.S. will continue to impose a 10 per cent import tax on most U.K. goods, it has also agreed to slash some of the import tariffs recently imposed on strategic industries such as automobiles and steel.
According to Michael Brown, senior market analyst at Pepperstone, there is a growing expectation that the US-China talks will lead to a de-escalation of geopolitical uncertainty. This is not a positive environment for gold, he adds, while seeing the potential for the price to test the $3,000 per ounce support level. However, he added that any pullback is a long-term buying opportunity.
Analysts believe that this bull market in gold is based on the fact that gold is the only real safe haven amidst the current political and geopolitical uncertainty, while also benefiting from the fact that a large number of countries (especially emerging market countries) are increasing their holdings of gold as a means of diversifying foreign exchange reserves. Coupled with the Fed’s hesitation to ease monetary policy, next week’s inflation data may also bring some volatility to the gold market.
Meanwhile, according to the latest U.S. Gallup survey results, gold is overtaking stocks as the second favorite long-term investment in America.
