AGORACOM Small-cap Investor Relations Blog

SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged 0.683 g/t Au over 780m in a vertical intercept. 2020 drilling plans 18,000 to 20,000 metres from 7-10 drill platforms with four diamond drill rigs. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits and is fully funded for exploration in 2020. Click Here For More Info

If you think gold GC00, +1.85% has jumped about 10% in a couple of days to $1,638 an ounce, the official price quoted on Wall Street, think again.

The real price? Nearer $1,800. If you can get it.

“There’s no gold,” says Josh Strauss, partner at money manager Pekin Hardy Strauss in Chicago (and a bullion fan). “There’s no gold. There’s roughly a 10% premium to purchase physical gold for delivery. Usually it’s like 2%. I can buy a one ounce American Eagle for $1,800,” said Josh Strauss. “$1,800!”

Major gold dealers have sold out of coins and gold bars amid panic buying as the U.S. economy plunges and the government agreed to a record $2 trillion emergency lifeline.

Kitco, the Canadian gold dealing giant, reported Wednesday that it was out of almost all standard one ounce gold coins. American Eagles and Buffaloes, issued by the U.S. Mint, were out of stock, it reported. Ditto Canadian “Maple Leafs,” issued by the Royal Canadian Mint, “Britannias” issued by the Royal Mint of Great Britain, and “Kangaroos” issued by Australia.

It was out of Krugerrands, issued by the South African government. Those are by far the most widely traded gold coins in the world.

Kitco did not immediately return an email for comment.

Read: Gold faces unique pricing, supply and delivery challenges amid COVID-19 shutdowns

“Due to extreme order volumes, please expect shipping delays of 15+ business days,” warned gold dealer JM Bullion.

Giant U.S. dealer Apmex admits Krugerrands are also out of stock. Deliveries of other coins, including Maple Leafs and Eagles, are delayed “due to extreme demand.” And it is charging a hefty premium for physical gold.

For a one ounce American Eagle: $1,788.

Meanwhile, over at the U.S. Mint, customer service reports they have Eagles available but to buy them direct will cost you $2,175. The media relations team could not immediately be reached.

Almost nobody on Wall Street has noticed the full price surge for actual gold bars and coins. That’s because financial traders mostly just deal in paper “contracts” for gold. Those are basically gold IOUs—a mere promise to deliver gold if the buyer ever wants.

Gold is among the most contentious financial topics around. It pits passionate true believers against total skeptics. People get heated and angry on both sides. Some say it is “the only true money.” Others call it little better than an unproductive superstition. The late British economist John Maynard Keynes called the gold standard, which pegged paper currency to the value of gold, a “barbarous relic” of a bygone age.

What should the average investor make of it? More critically, right now: Is there a case for putting holding some of your retirement account in gold? If so, how and how much?

“We’ve sold most of our gold as interest rates are rising and gold hasn’t liked that for a long time,” says Dennis Nolte, a financial adviser at Seacoast Bank. He adds: “As an asset class gold does best in certain environments, like declining interest rates. We like to own it tactically but not “all weather” as a core ETF (exchange-traded fund) or mutual fund holding.”

“We don’t view gold as a building block when constructing portfolios,” says Rob Greenman, a financial planner at Vista Capital Partners. “The hopes of appreciation are rooted in speculation—perhaps somebody is willing to pay more per ounce in the future versus the price per ounce today. Gold doesn’t produce any interest or earnings. We believe in building portfolios with mix of productive asset classes like stocks, real estate, and bonds around the globe.”

On the other hand, Thomas McCarthy, a financial planner at McCarthy & Cox, a firm that specializes in retirement planning and estates, says putting some of your retirement portfolio into gold isn’t crazy. “Gold can be a hedge against fear and holding a small 5% position of gold in an IRA or 401(k) (very few offer it) is not a bad hedge,” he says. “For clients looking to do so, we use a gold [exchange-traded fund] as opposed to actually buying the physical gold because its significantly less costly and easier to trade.”

But, he warns, “Investors in gold need to remember that gold doesn’t pay interest, doesn’t earn dividends and you make money only if the demand pushes the price higher. Many gold bugs who invested heavily in gold at its peak are still waiting many years later just to break even.”

There is no perfect answer because investing in gold ultimately requires someone else to want to buy it from you. It goes not generate income, like a stock or bond. And it’s not useful either—like food or, as people recently discovered, toilet paper.

Gold requires faith.

The good news? In this crisis you don’t have to choose one side definitely. You can be agnostic and keep your options open.

The events of the past month have upended the financial system. The Federal Reserve—and central banks overseas—have promised to print as much money as is needed to keep economies alive. The U.S. government has agreed to spend $2 trillion propping up the economy, and unless the crisis dissipates quickly that may not be the end of it.

Ordinarily, investors who wanted to protect their accounts from the twin perils of depression and inflation would look to appropriate Treasury bonds. But they are already extremely expensive by any historic measure, so they may offer limited protection. So-called “nominal” or regular Treasury bonds, the type most people own, now sport minuscule interest rates. Even the longest dated, 30 year Treasurys, yield just 1.4%. That is below most expected rates of inflation. Meanwhile Treasury inflation-protected securities or TIPS, a type of Treasury bond that is designed specifically to protect your money against any rise in consumer prices, now offer inflation-adjusted yields that are actually slightly negative. In other words, you’re almost guaranteed to lose a small amount of purchasing power over the life of the bond.

In these circumstances, gold ceases to look quite so crazy as portfolio insurance. There is genuine debate about whether gold offers a “long term hedge” against inflation. And no one actually knows what gold is “really” worth, if it is “really” worth anything. Intelligent, sane financial experts can make plausible cases for a range of values from a few hundred dollars an ounce to many thousands.

But gold makes more sense when viewed, not as an investment, but as a type of currency. It doesn’t produce anything, but it can be used as a medium of exchange. And history strongly suggests that it has a low correlation with other assets. In other words, it tends to “zig” when everything else zags.

It’s certainly done that under the current administration. Gold has risen by 38% since Donald Trump’s inauguration. Meanwhile the S&P 500 SPX, +3.85% index of large U.S. companies is up 13%, and the Russell 2000 RUT, +4.32% index of small U.S. companies is down 8%.

“The case for gold is simple,” says Strauss. “You want to own gold in times of financial dislocation and or inflation. And that’s been the case since time immemorial. And gold behaves well in those cases. In those cases stocks behave poorly. It’s a great portfolio hedge. Gold does poorly when you’ve got strong economic growth and low inflation. Tell me when that’s going to happen. Gold held its value during 2008 and after all that money printing it tripled over the next three years.”

Strauss recommends Sprott Physical Gold, PHYS, +1.41% an exchange-traded fund where shares are matched to actual bullion in a vault. He says he holds 25% of his personal wealth in gold. For those who are agnostics? “I think it’s criminal to go below 10%,” he joked, “but start with 5%.”

https://www.marketwatch.com/story/there-is-no-gold-bullion-dealers-sell-out-in-panic-buying-2020-03-25

Cardston, Alberta–(Newsfile Corp. – March 25, 2020) – American Creek Resources (TSXV: AMK) (the “Corporation” or “American Creek”) is pleased to announce its partner Tudor Gold Corp. (TSXV: TUD) (FSE: TUC) (“Tudor Gold”) has sufficient funds to execute a significantly larger drilling and exploration program, than the 2019 program, on the Goldstorm Zone at Treaty Creek project this year. With the capital raised in December 2019, as well as the recent warrants exercises, the Tudor Gold has a good cash position to execute a fully funded and very ambitious drill program at Treaty Creek this year. Tudor Gold is currently in the final stages of finalizing all preparations needed for the upcoming 2020 drill program at Treaty Creek.

Tudor Gold’s Vice President of Project Development, Ken Konkin, P.Geo., states: “The Goldstorm system is currently open at depth and along the northeast axis of the mineralized body. The drill program is designed to extend and to explore the limits of Goldstorm system to the southeast as well as to the northeast and to depth. We anticipate drilling approximately 18,000 to 20,000 metres of HQ and NQ diameter core from 7-10 drill platforms with four diamond drill rigs. Compared to the drill program last year (14 diamond drill holes over 9,781.8 meters), the planned 2020 drill program will be much larger.”

The current known length of the northeast axis of the Goldstorm System is over 850 meters long and the southeast axis is at least 600m across. The system remains open in all directions and to depth. The best mineralization encountered to date is from the two consecutive 150m step-out holes to the Northeast: GS-19-42 yielded 0.849 g/t Au Eq over 780 m with 1.275 g/t Au Eq over 370.5m and GS-19-47 yielded 0.697 g/t Au Eq over 1,081.5m with 0.867 g/t Au Eq over 301.5m.

The best southeast extension came from GS-19-52 which yielded 0.783 g/t Au Eq over 601.5m intercept with 1.062 g/t Au Eq over 336.0m intercept. (results from the company’s NR dated March 3rd, 2020).

Tudor Gold response to COVID-19:

Tudor Gold has introduced additional precautionary steps to manage and respond to the risks associated with COVID-19 virus. This includes, for example the cancellation of all non-essential global travel and the reducing in person meetings and transitioning to teleconferencing where possible. Vancouver office staff are now working from home until government advisories change.

Tudor Gold is regularly monitoring the situation and following local and national health authority requirements and recommendations.

Walter Storm, President and CEO of Tudor Gold stated: “We are taking all appropriate measures to protect the safety, health and well-being of our people and all those who interact with our business. Tudor Gold is following guidance and directives as updated by federal, regional and provincial health authorities in respect of general and drill-site specific protocols. We are very fortunate to have a strong balance sheet amidst the volatile market created by COVID-19.”

Qualified Person

The Qualified Person for this news release for the purposes of National Instrument 43-101 is the Company’s Vice President of Project Development, Ken Konkin, P.Geo. He has read and approved the scientific and technical information that forms the basis for the disclosure contained in this news release.

Treaty Creek JV Partnership

The Treaty Creek Project is a Joint Venture with Tudor Gold owning 3/5^th and acting as operator. American Creek and Teuton Resources each have a 1/5^th interest in the project. American Creek and Teuton are both fully carried until such time as a Production Notice is issued, at which time they are required to contribute their respective 20% share of development costs. Until such time, Tudor is required to fund all exploration and development costs while both American Creek and Teuton have “free rides”.

Treaty Creek Background

The Treaty Creek Project lies in the same hydrothermal system as Pretium’s Brucejack mine and Seabridge’s KSM deposits with far better logistics.

The Sulphurets Hydrothermal System

To view an enhanced version of this graphic, please visit:
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About American Creek

American Creek is a Canadian junior mineral exploration company with a strong portfolio of gold and silver properties in British Columbia. Three of those properties are located in the prolific “Golden Triangle”; the Treaty Creek and Electrum joint venture projects with Tudor Gold/Walter Storm as well as the 100% owned past producing Dunwell Mine.

More information about the Treaty Creek Project can be found here: https://americancreek.com/index.php/projects/treaty-creek/home

The Corporation also holds the Gold Hill, Austruck-Bonanza, Ample Goldmax, Silver Side, and Glitter King properties located in other prospective areas of the province.

For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Corporation is available on its website at www.americancreek.com

SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged of 0.683 g/t Au over 780m in a vertical intercept. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits. Click Here For More Info

• Tudor Gold said it had discovered a significant new copper-silver horizon within the Goldstorm system.
• The newly discovered copper-rich CS 600 Horizon is a very important feature of the Goldstorm System.
• Presence of copper and silver mineralization gives this discovery a true polymetallic nature yet it remains a gold-dominant project.

Tudor Gold Corp. [TUD-TSXV, TUC-Frankfurt] has released the results of gold-equivalent calculations for all drilling completed at the company’s Treaty Creek project, which is located in British Columbia’s Golden Triangle region.

These calculations are posted on the company’s website and include credit for previously analyzed values for copper and silver. Geological analysis and reinterpretation of all the drill holes to date exposed a new copper horizon (CS 600 horizon) as well as significant silver and copper mineralization through the Goldstorm system, the company said in a press release, which was issued just after the close of trading on March 3, 2020.

On Wednesday, Tudor shares eased 4.0% or $0.02 to 48 cents on volume of 309,585. The shares are currently trading in a 52-week range of 26 cents and $1.08.

Tudor Gold holds a 60% stake in the Treaty Creek joint venture and is the project operator. The other partners are American Creek Resources Ltd. [AMK-TSXV] and Teuton Resources Corp. [TUO-TSXV, TUC-Frankfurt], each of which hold a 20% stake in the project. American Creek and Teuton are both fully carried to a production notice. At that point, each of the two is required to contribute their respective 20% share of development costs.

Until that happens, Tudor is required to fund all exploration and development costs. The property is also subject to 3% net smelter return royalties.

The 17,913-hectare Treaty Creek Project borders Seabridge Gold Inc.’s [SEA-TSX, SA-NYSE] KSM property to the southwest and borders Pretium Resources Inc.’s [PVG-TSX] Brucejack property to the southeast. The past-producing Eskay Creek mine lies 12 kilometres to the west.

Exploration of the Treaty Creek area over the past 30 years by various junior companies has resulted in the discovery of a number of surface mineral showings, some with very high gold and silver values.

There have been over 150 diamond drill holes completed on the property from 1987 to date, in eight different mineral zones. However, it is only recently that drilling revealed the potential for a large-scale porphyry-style gold deposit at the Copper Belle and Goldstorm zones, which are located on trend and just five kilometres northeast of the KSM deposits.

In a press release on December 16, 2019, Tudor Gold said it had discovered a significant new copper-silver horizon within the Goldstorm system.

The newly discovered copper-rich CS 600 Horizon is a very important feature of the Goldstorm System, the company has said. It said presence of copper and silver mineralization gives this discovery a true polymetallic nature yet it remains a gold-dominant project.

“We are very encouraged to see that the silver copper mineralization has made an important impact to the gold equivalent results from our recent drilling as well as the historical drilling,’’ said Ken Konkin, vice-president of project development at Tudor Gold.

“The next step is to plan the drill hole program for the 2020 exploration season,” he said. The company’s goal is to design a diamond drill program that will fast-track the exploration program for 2020 with the objective to begin mineral resource estimate work as soon as possible.

Bay Street billionaire Eric Sprott recently increased his stake the company to 14.1% by investing in a non-brokered private placement of 4.2 million shares that raised $2.93 million. The shares are priced at 70 cents each.

About American Creek

American Creek holds a strong portfolio of gold and silver properties in British Columbia. The portfolio includes three gold/silver properties in the heart of the Golden Triangle; the Treaty Creek and Electrum joint ventures with Walter Storm/Tudor, as well as the recently acquired 100% owned past producing Dunwell Mine. Other properties held throughout BC include the Gold Hill, Austruck-Bonanza, Ample Goldmax, Silver Side, and Glitter King.

For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Company is available on its website at www.americancreek.com

SOURCE:  Resource World

Cardston, Alberta–(February 27, 2020) – American Creek Resources Ltd. (TSXV: AMK) (“the Corporation”) is pleased to report the assays from phase 1 drilling from the 2019 fall drill program that was conducted at the company’s 100% owned Dunwell Mine property located in the Golden Triangle of British Columbia.

The Dunwell Mine is a high-grade past producing polymetallic mine located just 8km by road from the shipping town of Stewart. This property boasts exceptional logistics and a rich mining history with significant potential for future development. A significant geological feature running through the property is the Portland Canal Fissure Zone. With the recent acquisition of the Glacier Creek claims American Creek now controls 5km of the 6.5km Portland Canal Fissure Zone which contains numerous high-grade polymetallic mineral occurrences including two past producing mines (the Dunwell and Portland Canal). Very little modern exploration has been done on the property. While there is huge potential exploring along the extended reaches of the fissure zone, the initial drill program was designed to test areas near the workings of the Dunwell mine itself.

The initial objective for the drill program was to test the down dip extension of the Dunwell main vein below sub-level 4. The second objective was to test geophysical anomalies from an Induced Polarization (IP) survey conducted later in the fall of 2019. Both of these objectives were successfully accomplished with this drill program.

A total of 20 holes totaling 3,245.9m were completed on the property. The first 14 holes were based on geological and historical data and were successful in encountering veins of high-grade polymetallic mineralization including 20.3 g/t AuEq over 2.7m, 18.4 g/t AuEq over 1.5m, 28.6 g/t AuEq over 0.5m and 24.4 g/t AuEq over 0.5m.

Holes DW19-04 to DW19-08 were drilled to test the down dip of the Dunwell zone below sub-level 4.

*AuEq uses $1,500 gold, $18 silver, $0.88 lead, $0.95 Zinc and $2.5 copper

Results show high-grade hits, including 13.2 g/t AuEq, in this series of holes that traversed from the east southeast to the east. The holes consistently hit two zones, both at the base of dikes at 22 – 26 meters and 83 – 87 meters. These two zones, seen in the five holes, run sub-parallel to the fault the drill pad was located on and trend for some distance to the north.

Hole DW19-09 was drilled to test the north extension of the main zone below level 4. The first breccia below the dike shows up in this hole with a 28.5 g/t AuEq assay and the second with a 18.4 g/t AuEq assay.

Hole DW19-10 was drilled to test below sub-level 4 but further to the southeast from hole DW19-04.

The two breccias below the dikes, seen in holes 7 and 8 are present.

Holes 11 to 13 were drilled to follow up on the results from hole 9. The holes were drilled in a fan where holes 11 and 12 were drilled at a steeper angle to test below hole 9 and hole 13 was drilled at a flatter angle to test above hole 9. Hole 14 was drilled at a 5° rotation to the north of hole 9 to test the width of the structure.

All the holes intersected the breccia below the dike at about 27 meters. Holes 11, 13 and 14 appear to intersect a similar structure to that seen in hole 9. Multiple high-grade intercepts assayed as high as 24.3 g/t AuEq, 20.3 g/t AuEq, 16.3 AuEq, and 15.1 g/t AuEq while the remaining intercepts were still strong.

No modern exploration techniques or technologies have been used on the Dunwell until a cutting edge Induced Polarization (IP) survey took place in late fall of 2019. Only two of the dozens of geophysical anomalies identified in the survey in close proximity to the Dunwell Mine were drill tested in this first phase of drilling.

The last 6 holes (DW19-15 to DW19-19) were drilled to test the extent of a large IP anomaly and were successful in encountering veins of high-grade polymetallic mineralization including 19.4 g/t AuEq over 3.6m, 38.1 g/t AuEq over 0.5m and 28.4 AuEq over 0.4m with the remaining intercepts also containing significant mineralization.

Hole 15 was drilled south into the anomaly and Hole 16 was drilled west into the anomaly with both intersecting a massive sulphide zone. Holes 17 – 19 were drilled in a fan to follow up hole 16. Hole 18 also hit a massive sulphide zone.

Hole 16 hit a massive sulphide interval at 75 – 78 meters. Hole 20 was drilled to test an IP anomaly along the access road below the second drill pad. One small breccia was intercepted.

CEO and President, Darren Blaney stated: “Our very first drill program has intersected a significant number of high-grade veins in the vicinity of the mine workings confirming our belief in the potential of this project.

The Dunwell is an incredibly prospective property located in the heart of the Golden Triangle. It has everything going for it from amazing logistics to past high-grade production, with all indications being that there is substantive additional ore yet to be mined.

With the recent acquisition of the Glacier Creek Crown Grants we now cover 5km of the heavily mineralized Portland Canal Fissure Zone which runs for 6.5km and is associated with over a dozen high-grade gold and silver showings including two past producing mines. The potential of the property extends far beyond the old workings of the Dunwell Mine. Future exploration will be using the latest technologies to aid us in unlocking that potential.”

To view an enhanced version of this graphic, please visit:
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Property Description and History

Through a series of strategic acquisitions American Creek was able to purchase the past-producing Dunwell Mine as well as several adjoining very prospective properties, combining them into one large land package that encompasses the best gold and silver mineral occurrences and historic workings in the Bear River valley. The amalgamated property spans 2,222 hectares covering the majority of the Portland Canal Fissure Zone, an area first prospected in the late 1800’s and hosting some of the earliest producing gold and silver mines in the Stewart area.

The Dunwell project is located 8km northeast of Stewart and is road accessible with the Dunwell Mine adit itself located only 2km from Highway 37A and a major power line. Stewart hosts a deep sea port including ore loading and shipping facilities. Unlike the majority of mineral properties located near Stewart, the Dunwell is located in low mountainous terrain (700 m and lower elevation) with moderate relief. These features allow for year-round work which typically isn’t the case for exploration programs conducted in the Stewart region where projects are typically at higher altitude, are accessible only by helicopter, and lack critical infrastructure such as roads and power. The Dunwell project may just have the best logistics of any project in the Golden Triangle.

To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/682/52888_602268149456990f_002full.jpg

The Dunwell Mine is the most significant mineral occurrence within the Portland Canal Fissure Zone. Production at the Dunwell occurred between 1926 and 1937. From historic reports, it appears that a total of 45,657 tonnes averaging 6.63 g/t gold, 223.91 g/t silver, 1.83% lead, 2.43% zinc and 0.056% copper were produced.

In addition to the Dunwell mine itself, the property package also contains over a dozen other high-grade gold and silver occurrences and historic small-scale gold/silver high-grading operations along a north/south trend that correlates to the fissure zone and major faulting. Some examples of the nine areas that actually produced ore are:

• Ben Ali:                   4,500 tons at 21.6 g/t gold
• Lakeview                60 tons at 4.7 g/t gold, 2,734 g/t silver, and 11.5% lead
• Victoria                   11 tons at 20.15 g/t gold, 775 g/t silver, 25% lead
• Tyee                       8.2 tons at 124.4 g/t gold and 4,478.8 g/t silver
• George E               12 tons at 13 g/t gold and 3,250 g/t silver, 23.3% lead

Each of these areas were producing during the 1930’s when exploration techniques and technology was very primitive. American Creek has already started to use the latest in exploration technology on the property and will continue to do so to unlock the great potential that exists here.

For more information on the Dunwell Mine please click here:
https://americancreek.com/index.php/projects/dunwell-mine

Qualified Person

The Qualified Person for the Dunwell results in this new release is James A. McCrea, P. Geo., for the purposes of National Instrument 43-101. He has read and approved the scientific and technical information that forms the basis for the disclosure contained in this news release.

About American Creek

American Creek holds a strong portfolio of gold and silver properties in British Columbia. The portfolio includes three Golden Triangle gold/silver properties; the Treaty Creek and Electrum joint ventures with Walter Storm/Tudor as well as the 100% owned past-producing Dunwell Mine. Other properties held throughout BC include the Gold Hill, Austruck-Bonanza, Ample Goldmax, Silver Side, and Glitter King.

For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Corporation is available on its website at www.americancreek.com

SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged of 0.683 g/t Au over 780m in a vertical intercept. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits. Click Here For More Info

• Exchange-traded fund holdings expand for 25 days to most ever

• Moody’s Analytics says recession possible if pandemic occurs

Global investors are stashing more and more assets into gold as the coronavirus outbreak spreads and appetite for risk takes a hit.

The global tally of bullion in exchange-traded funds swelled by the most in more than a month on Tuesday as equities sank. That was the 25th consecutive day of inflows, a record. At 2,624.7 tons, the holdings are the largest ever.

After surging 18% last year, gold has extended its rally in 2020, with prices hitting the highest since 2013. The haven has been favored as the virus outbreak has spread beyond China, threatening a pandemic and slower growth.

Goldman Sachs Group Inc. has said that should the disruption from the disease stretch into the second quarter, prices may rally toward $1,850 an ounce. Spot bullion was last at $1,644.67, up 0.6%. It touched $1,689.31 on Monday.

A global recession is likely if the coronavirus becomes a pandemic, according to Moody’s Analytics Chief Economist Mark Zandi. The odds of that outcome now stand at 40%, up from 20%, he said in a note.

The threat of a prolonged downturn in growth due to the impact of the virus may keep gold elevated, according to Morgan Stanley. Further ETF inflows are likely as long as real interest rates remain negative, it said in a note.

SOURCE tps://www.bloomberg.com/news/articles/2020-02-26/investors-pour-more-and-more-assets-into-gold-on-virus-alarm

SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged of 0.683 g/t Au over 780m in a vertical intercept. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits. Click Here For More Info

• Gold is reporting its biggest monthly gain since August 2019. 
• January’s price rise has confirmed a resumption of the rally from lows seen in May 2019. 
• Safe haven flows and dovish Fed expectations could continue to push the yellow metal higher.

Gold has printed its biggest monthly gain in five months, signaling a resumption of the rally from lows near $1,266 seen in May 2019. 

The yellow metal is currently trading at a 4.00% gain from the opening price of $1,517.70 observed on Jan. 2. That is the biggest monthly price rise since August 2019. Back then, gold had rallied by 7.65%. 

Haven flows

The US-Iran tensions escalated on Jan. 3, putting a strong haven bid under gold. The yellow metal rose from $1,550 to a six-year high of $1,611 in the five days to Jan. 8. 

The break above $1,600 seen during the Asian trading hours on Jan. 8 was short-lived, as tensions quickly eased after media outlets reported zero US casualties in Iran’s retaliatory attack on US bases in Iraq.

Gold fell back sharply to $1,550 on the same day and extended losses to $1,536 by Jan. 14, before regaining poise on coronavirus scare. 

The mysterious Wuhan coronavirus spread quickly within China during the second half of the month. Cases were also registered in Japan and other Asian currencies and in the US and Europe. As a result, fear gripped markets that China is struggling to contain the virus and it could turn into a pandemic, derailing the global growth story. 

Risk assets, therefore, took a beating and safe havens like gold, US treasuries, and yen found love. 

Additionally, markets ramped up expectations for a Federal Reserve rate cut by December and the central bank reinforced the dovish expectations by reiterating its commitment to high inflation. 

As a result, gold moved higher to $1,589 earlier Friday and is about to end the week with nearly 1 percent gain. 

Looking forward, the coronavirus fears and the dovish Fed expectations could continue to push the yellow metal higher. 

Many observers have revised lower their forecast for China’s first-quarter GDP growth. For instance, Citigroup on Friday said it expects China’s GDP growth to slow to 4.8% this quarter from 6.0% in the fourth quarter. It cut its full-year forecast for 2020 to 5.5% from 5.8, according to Bloomberg. 

Further, analysts think the slowdown will force the Chinese government and the People’s Bank of China to take action. Yields on government bonds and currency usually drop with monetary easing, making the zero-yielding yellow metal look attractive. 

As for next week, the focus will be on Caixin PMIs for China and key US data releases – ISM Manufacturing and Non-Manufacturing data, ADP report and the monthly Nonfarm Payrolls report. 

Fed rate cut expectations would strengthen, possibly yielding a stronger rally in gold if the payrolls and wage growth figures disappoint expectations.

Technical outlook

The metal traded in a sideways manner for four months, starting from September to December. The range play has ended with a bullish breakout with January’s 4% gain. 

The range breakout indicates the rally from the low of $1,266 seen in May 2019 has resumed. 

The next major resistance as per the monthly chart is $1,733. That level marks the 78.6% Fibonacci retracement of the sell-off from $1,920.94 to $1,046.54. 

The daily chart is also biased bullish. Notably, the RSI is again looking north, having established support at 62.00. 

The odds appear stacked in favor of a re-test of the high of $1,611 registered on Jan. 8. 

The outlook would turn bearish if and when the daily chart RSI violates the support at 62.

SOURCE: https://www.fxstreet.com/analysis/gold-price-forecast-rally-from-may-2019-low-resumes-with-biggest-monthly-gain-in-5-months-202001312013