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Deciphering Gold Prices: Predictions for 2024

29 November 2023 10:34
ASX: OAU

The price of gold has surged this week, surpassing the $2000 USD per ounce mark and reaching $2047.10 USD/oz. This significant milestone has prompted financial analysts to contemplate whether preceding years have been a consolidation phase, setting the stage for a potential bullish trend in the commodity.

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Figure 1: Gold price in USD per ounce. Source: Kitco

Gold tends to thrive in inflationary or weaker economies, serving as a favoured hedge for investors seeking to safeguard wealth during economic turmoil.

Amidst the current economic volatility, marked by rising interest and inflation rates, gold has surpassed $2000 USD/oz, sparking debate among experts about its trajectory in 2024.

Investing Haven predicts gold to trade near $2,200 in 2024, citing factors such as the prevailing strength of the US Dollar, lower yields, and the ostensibly ‘bullish’ positioning of gold’s Commitments of Traders.

The potential upward shift in the commodity’s pricing is often ascribed to various factors, including heightened industrial demand, Federal Reserve policy adjustments, geopolitical considerations, and the impending US presidential election. Many market observers foresee a potential increase in prices in 2024, followed by the gold price holding firm thereafter.

Junior’s Exploring Gold

Fluctuations in interest rates also wield a significant impact on not only broader capital markets, but junior explorers in the sector.

Ora Gold’s CEO Alex Passmore says heightened interest rates are essentially resulting in a withdrawal of capital from the market.

“[Higher interest rates] take people’s discretionary or investment money away from the market in the retail sector, whilst also increasing the cost of portfolios for institutional investors if they’re leveraged,” he says.

This significantly impacts entities within the industry, particularly exploration companies that have not yet reached the production phase. These organisations depend on capital infusion to support and drive their expansion initiatives.

“We have a scenario where the producers doing really well and enjoying strong margins and high cash earnings, and the explorers who are reliant on the capital markets are doing it a bit tougher.”

Mr. Passmore says to narrow the gap between explorers and producers, the gold price must reach a level where it becomes more cost-effective for producers, seeking long-term resource growth, to acquire established resources from explorers, rather than attempting to discover the resource independently.

Ora Gold (ASX:OAU)

Ora continues to ‘strike gold’ at its Crown Prince Prospect, with its latest drilling campaign in October yielding high-grade gold intercepts.

The recent phase of Reverse Circulation (RC) and Diamond Drilling (DD) at the Crown Prince South Eastern Ore Body builds upon previously reported intersections, highlighting notable results such as 1 metre at 69.3g/t Au from a depth of 226 metres.

Other significant intercepts from the Company’s most recent campaign include:

  • 1 metre at 18.07g/t Au from 203 metres within 9 metres at 4.46g/t Au from 202 metres
  • 1.55 metres at 7.7g/t Au from 192.15 metres in OGGRCDDRC586
  • 11 metre at 3.93g/t Au from 114 metres in OGGRC606
  • 2 metre at 6.36g/t Au from 135 metres in OGGRC612

Mr. Passmore is encouraged by the latest results.

“These results are yet to be incorporated into a resource so we are looking forward to doing that,” he says.

Over the upcoming six months, the Company’s schedule is filled with a series of essential technical studies that must be finalised to advance towards a mining scenario.

“It’s a busy six months ahead. We will have further drilling results, mineral resource estimations at Crown Price, technical studies, geotechnical work, hydrogeological work and environmental studies.”

The Company eagerly anticipates the outcomes of the remaining 45 holes drilled during the previous campaign, drilled to a combined depth of 4,332 metres.

OAU’s Australian Stock Exchange-listed share price is currently trading at $0.006 (10.00am UTC+ 8 hours).

Rincon Resources (ASX:RCR)

Rincon Resources, a junior exploration company, holds stakes in three promising copper-gold projects located in Western Australia – South Telfer, Laverton, and Kiwirrkurra.

The South Telfer Project, a key focus for the Company, encompasses six exploration licenses and two prospecting licenses, spanning over 540 square kilometres.

This area boasts a geological profile with a striking length exceeding 40 kilometres, recognised for its potential to host substantial deposits of gold and copper minerals.

The inaugural drilling initiative at the Hasties Prospect has not only extended the mineralised area but also substantiated the existence of expansive, shallow zones containing copper-gold mineralisation.

Notably, the findings reveal the presence of significant high-grade zones, with gold grades reaching up to 17.4g/t.

Furthermore, its Mammoth target within the South Telfer Project is strategically positioned 700 metres northeast of the promising Westin Prospect, where historical drill hole WSA08039 documented high-grade gold mineralisation, specifically intersecting 8 metres at 3.85g/t Au from 84 metres downhole, with a notable subset comprising 4 metres at 6.9g/t Au from 88 metres.

This underscores the potential for valuable mineral resources in the vicinity, adding an additional layer of significance to the broader Project’s exploration efforts.

RCR’s Australian Stock Exchange-listed share price has risen 6.666% and is currently trading at $0.032 (10.00am UTC+ 8 hours).

Miramar Resources (ASX:M2R)

Miramar Resources operates as a Western Australian-focused exploration company, actively engaging in projects within the Eastern Goldfields and Gascoyne regions.

The Company’s Whaleshark Project is situated in the highly prospective Capricorn Orogen region, known for its potential in copper-gold and rare earth element (REE) mineralisation.

Additionally, Miramar’s Gidji joint venture Project, located in the Eastern Goldfields, boasts an impressive 15 kilometres of strike along the Boorara Shear Zone, underlining the Company’s commitment to exploring and uncovering valuable resources in these strategic areas.

Miramar has been engaged in proactive exploration efforts at the Gidji Project, leading to the discovery of multiple new targets.

Substantial aircore gold anomalies have been delineated at Marylebone, Blackfriars, and Highway/Piccadilly, presenting the potential for significant gold discoveries at each site.

Of particular note, the Marylebone target is assigned the highest priority, boasting a considerable shallow gold ‘Exploration Target’ estimated at 1.4 to 3.2 million metric tonnes with a grade ranging from 1.2 to 1.5 grams per tonne of gold.

M2R’s Australian Stock Exchange-listed share price is currently trading at $0.019 (10.00am UTC+ 8 hours).

De Grey Mining (ASX:DEG)

Transitioning from the junior sector, De Grey Mining emerges as a significant large-cap exploration entity based in Western Australia, specialising in gold exploration and project development.

The Company boasts a substantial market capitalisation of $2.41 billion.

Its primary focus lies in the Hemi Gold Project, situated in the Pilbara region of Western Australia. Notably, the Project encompasses a sizeable, high-value gold discovery near the surface.

The Hemi discovery, with a mineral resource of 9.5 million ounces showcasing openness in multiple directions, contributes to an impressive cumulative Mineral Resource Estimate of 11.7 million ounces.

DEG’s Australian Stock Exchange-listed share price has risen 4.406% today and is currently trading at $1.362 (10.00am UTC+ 8 hours).

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