1911 Gold Corporation (TSXV: AUMB; OTCQX: AUMBF)
1911 Gold is Manitoba’s Gold Standard - Ready, Permitted and High-Grade 1911 Gold is an Emerging Gold Producer, with Significant Cash Flow Generation and District-Scale Growth Potential
Driven by expectations of a Federal Reserve interest rate cut, gold prices are poised for a fourth consecutive weekly gain, reaching a new all-time high. This week, gold approached $3,650 per ounce, with a weekly increase of approximately 1.7%. Silver also strengthened, breaking above $42 per ounce to hit its highest level since 2011. The consumer confidence index released on Friday fell to its lowest level since May, while long-term inflation expectations rose for the second consecutive month, exacerbating market concerns about the economy and inflation. Traders have increased their bets on an imminent Fed rate cut. As a non-yielding asset, gold typically performs well in a low-interest-rate environment.
Since the beginning of the year, gold prices have risen nearly 40%, making it one of the best-performing commodities and outpacing major stock indices such as the S&P 500. Central bank purchases, geopolitical uncertainties, and inflows into ETFs have collectively fueled this rally. Gold has not only set a nominal record but has also surpassed its inflation-adjusted peak from 45 years ago. As of Thursday, global gold ETF holdings increased by nearly 17 tons in a single week.
UBS Group has raised its gold price forecast for the end of 2024 from $3,500 per ounce to $3,800 and expects it to reach $3,900 by mid-2026. The bank cited declining interest rates, a weaker U.S. dollar, and increased ETF holdings as core supporting factors. The persistent weakness of the dollar has boosted demand for gold as a hedge, while the potential decline in U.S. policy rates further enhances its appeal. UBS also raised its price forecast for the end of 2025 to $3,800 and its mid-2026 forecast to $3,900, citing the Fed’s shift toward a more accommodative monetary policy and geopolitical risks putting pressure on the dollar.
UBS also adjusted its estimates for gold ETF holdings, projecting total holdings to exceed 3,900 tons by the end of 2025, nearing the record set in October 2020. The firm maintains a bullish stance on gold, recommending a mid-single-digit percentage allocation to gold in investment portfolios. It noted that geopolitical tensions, U.S. policy divergences, and continued central bank purchases provide medium- to long-term support for gold prices. Global central bank gold purchases are expected to reach 900–950 tons this year, slightly below last year’s near-record level of over 1,000 tons but still within a strong range. UBS also cautioned that if inflation exceeds expectations and forces the Fed to pivot to rate hikes, it would pose a major risk for gold.
