Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush - TARGETING 5 MILLION OZ. AT 1+ G/T
Gold prices continued their decline on Friday, on track for a second consecutive weekly drop. The ongoing escalation of geopolitical conflicts in the Middle East has kept international oil prices above $100 per barrel, intensifying global inflationary pressures. Although the conflict has persisted for nearly two weeks with no signs of abating, gold, traditionally viewed as a safe-haven asset, has failed to gain traction. US President Donald Trump stated that he has raised strikes against Iran to an “unprecedented level,” suggesting that the war, which is disrupting energy flows and reshaping market dynamics, will not cease in the short term.
Spot gold once dipped 1.4% to near the $5,000 per ounce mark, with a stronger dollar further weighing on prices. Barbara Lambrecht, a commodity analyst at the Research Department of Commerzbank, noted on Friday: “Gold prices have consistently failed to benefit from geopolitical crises. The significant rise in oil and gas prices this week has heightened inflation risks, which could force central banks to take countermeasures.” Market data indicates that rising energy prices and growing inflation concerns have significantly dampened investor expectations for interest rate cuts by major central banks like the Federal Reserve.
The latest economic data showed that US consumer spending increased only marginally in January, impacted by weaker-than-expected economic growth. This report has exacerbated market concerns about inflationary pressures already building before the escalation of the Iran situation. Meanwhile, the US consumer confidence index fell to a three-month low, reflecting growing public anxiety over rising gasoline prices due to the conflict.
Interest rate futures markets indicate that traders have fully priced out the possibility of a Fed rate cut at next week’s meeting, and the probability of a rate cut within the year has also dropped to 80%. Since precious metals themselves do not yield interest, rising financing costs typically put pressure on their prices. Against the backdrop of Trump’s continued pressure for rate cuts, mounting inflationary pressures could further delay the timing of any rate reduction.
Despite recent pressures, gold prices are still up 16% year-to-date, largely holding the key $5,000 per ounce level. In late New York trading, spot gold settled at $4,982 per ounce, with a weekly decline of about 3%, marking the first instance of two consecutive weekly drops since last November. Silver fell to $24.50 per ounce, while platinum and palladium also moved lower. The Bloomberg Dollar Spot Index was on track for a weekly gain.
The market showed divergent trends: the LBMA afternoon fix (in USD) continued to climb in February, while the Shanghai Gold Benchmark Price (in RMB) retreated due to the strength of the local currency. Since the beginning of March, both benchmark prices have held steady above key thresholds.
Wholesale demand during the Chinese New Year period demonstrated resilience, with a modest year-on-year decline of only 5 tonnes to 85 tonnes, supported by pre-holiday stockpiling and strong investment demand. Domestic gold ETFs attracted RMB 4.5 billion (approximately $640 million) in inflows in February, with holdings increasing by 4 tonnes to 290 tonnes. However, due to lower gold prices, assets under management edged down 1% to RMB 331 billion (approximately $48 billion). Since early March, rising safe-haven demand has further accelerated inflows.
It is worth noting that China’s gold reserves have increased for 16 consecutive months, adding another 1 tonne in February to reach 2,309 tonnes. Gold currently accounts for 10% of total foreign exchange reserves.
