Gold is Not a Gamble

Gold trading has picked up on real demand from individuals, institutions and Governments, $2000 is now with in reach and 2013 could see the metal trading higher still.

Gold companies have not seen a shift in the market that reflects the new long term value of Gold and Gold miners, and those holding large reserves are undervalued.

Here are 3 small companies worth a closer look.

Gold exploration company Pilot Gold has made a new gold discovery at its 100% owned Brik Project in southeast Nevada, US.

According to the company, the first holes drilled on the Hidden Treasure Target have intersected wide intervals of near surface oxide gold mineralization from a sub-horizontal zone that remains open in all directions.

Ausgold Limited ("Ausgold" or "the Company") (ASX: AUC) is pleased to announce that the latest round of assay results from its ongoing drilling program at the Katanning Gold Discovery confirm that two corridors of gold mineralisation are present within the Fraser Prospect.

Fraser is located 500m south of the Jinkas ore body on the Eastern Corridor and 1.6 kilometres north of the Dingo ore body. These results indicate that the gold mineralisation at Jinkas may extend a further 1 kilometre south of the known mineralisation.

Ausgold recently completed a 79 hole air core drilling programme at its Fraser prospect (Figure1), which is located between the Jinkas and Dingo gold deposits. This program was designed to test a historic gold-in-soil anomaly located south and along strike of the Jinkas ore body.

Arizona Gold and Onyx Mining Co PINK:VGCP is pursuing exploration and development on its polymetallic property, known as the Mayer Project, located in Arizona, the leading mining state in the U.S.A. Due to probable acquisitions, the estimated projections by the end of 2011 are: $1 Billion in onyx and between 18M and 24M ounces of gold. These projections do not include other precious metals, such as silver or copper.

Spot gold gained 0.4 per cent to $US1666.49 an ounce, off a record of $US1672.65 set in the previous session.

US gold edged up 0.2 per cent to $US1669.6 an ounce. It reached an all-time high of $US1675.9 on Wednesday.

Gold has hit record highs in the past two consecutive sessions, even after the United States averted a debt default, as investors focused on the gloomy outlook for global growth, while the sovereign debt crisis in the euro zone threatened to engulf Italy.

The European Central Bank is expected to halt its rate hike cycle and probably signal a readiness to buy bonds again, when policymakers meet later in the day.

Investors are also eyeing the key US payrolls data for July due on Friday, after a recent spate of disappointing data including slowing manufacturing sector growth and faltering consumer spending fueled fears of deteriorating economic conditions.

The US dollar rose nearly half a per cent against a basket of currencies, as it climbed above 79 yen for the first time in two weeks after the Bank of Japan intervened in the market intermittently to stem the yen's strength.

A stronger US dollar usually discourages buying by holders of other currencies, but worries about contagion from the debt crisis in Europe and sluggish US growth outweighed the action by Japan's central bank.

Technical analysis suggested that gold could rise to $US1679 an ounce, said Reuters market analyst Wang Tao.

The Relative Strength Index, or RSI, for gold climbed above 75, its highest since the end of April during bullion's previous record-setting rally.

An RSI reading above 70 indicates the market is overbought.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose for a second day straight to 1286.30 tonnes on Wednesday, highest since late December.

The amount of gold held by the fund grew nearly 7 per cent since the beginning of July, compared to a 6-per cent, or 72-tonne, outflow in the first half of the year.

Recent reports of central banks' gold purchases reassured investors that gold's bull run may have a long way to go.

Spot silver rose to as high as $US42, matching a three month high set on Wednesday. Silver is far from breaking its record of $US49.51 set at the end of April, but leads the precious metals complex with a gain of 36 per cent so far this year.

Spot gold has risen about 17 per cent so far this year.

Shayne Heffernan

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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