Gold Digger: Geopolitical tantrums help, but they aren’t the main reason gold prices will recover later this year

The gold price traditionally thrives on geopolitical drama.

Heightened tensions in eastern Ukraine, the recent incident at an Iranian nuclear site, and news of an unofficial US delegation visiting Taiwan are recent reminders that 2021 will be yet another year when geopolitical risks abound.

These potential flareups – in a world still knocked about by COVID-19 – could benefit the gold price, and by extension, gold stocks.

However, history shows us that the positive impact is short-lived, Metals Focus says.

>>> scroll down for the performance of ASX-listed gold & silver stocks over the past week >>>

“We think it unlikely that such events will have a lasting effect on gold and other precious metals prices,” it says.

“This assessment is based on how gold has often reacted to crises over the past 30-40 years.

“In most cases … gold did achieve some healthy upside, in some cases quite dramatically.

“However, this often proved to be a knee-jerk reaction, with prices quite often returning to pre-crisis levels in a relatively short period of time.”

An outlier was the Soviet Union’s invasion of Afghanistan in December 1979, Metals Focus says.

“Who Are You?” “Your Worst Nightmare.”   (Rambo III (1988), TriStar Pictures)

 

“Although the price had been rising for some time before the invasion (as the second oil crisis unfolded), this saw gold more than double in a matter of days to a then all-time high of around $850/oz,” it says.

“Gold then remained strong for an extended period, but this owed more to the oil crisis and its impact on the global economy, including the US dollar, which at that time had weakened to multi-year lows.”

The emphasis — and  ‘Rambo fighting Russians in Afghanistan’ gif — are ours.

It indicates that the macro backdrop is more important to the gold price than Rambo’s geopolitical posturing.

The backdrop is positive in 2021, Metals Focus says.

“Monetary and fiscal policies, including the persistence of ultra-low interest rates and negative real yields, and concerns about future inflation will continue to make the case for strong gold investment for the foreseeable future,” it says.

“Partly related to this, we are sceptical that the recent strength in the US dollar will continue as we progress through this year.

“We believe all this will eventually help gold to recover, with the price expected to strengthen later this year and into 2022.”

$USD gold price over the past 12 months.

 

Winners and Losers

Here’s how ASX-listed gold and silver stocks are performing:

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop

CODECOMPANY1 WEEK RETURN %1 MONTH RETURN %6 MONTH RETURN %1 YEAR RETURN %PRICE MARKET CAP
ANLAmani Gold500-25-250.0015 $ 10,786,996.75
NPMNewpeak Metals5050000.003 $ 17,022,483.89
LCYLegacy Iron Ore474734021000.022 $ 128,094,770.34
PNMPacific Nickel Mines33515-400.06 $ 8,986,475.28
FFXFirefinch3336745780.305 $ 226,854,714.73
NAENew Age Exploration313167500.017 $ 18,293,143.65
E2ME2 Metals2713905250.4 $ 54,057,026.16
ARNAldoro Resources251283592560.445 $ 29,955,553.32
ONXOrminex2468108440.052 $ 25,524,429.26
BBXBBX Minerals21-15-481090.23 $ 88,982,476.10
KCCKincora Copper200.265 $ 12,000,000.00
GTRGti Resources192594000.025 $ 16,757,467.95
VRCVolt Resources1912582170.019 $ 45,226,233.92
AMEAlto Metals Limited1835-5720.105 $ 42,324,415.09
GWRGWR Group1717493360.305 $ 89,322,000.69
REDRed 5 Limited177-33-140.19 $ 409,998,317.57
PDIPredictive Disc162746800.089 $ 84,416,966.21
GBZGBM Rsources155-23770.115 $ 51,962,167.20
TLMTalisman Mining14244620.12 $ 19,595,980.43
PNXPNX Metals Limited1414-27140.008 $ 27,391,451.33
BRBBreaker Res NL14234200.24 $ 74,943,413.67
HRNHorizon Gold14221440.44 $ 38,631,448.68
SKYSKY Metals1310-6-380.17 $ 40,697,221.62
AMIAurelia Metals1320-8330.46 $ 549,275,303.63
MM8Medallion Metals.130.27 $ 20,447,019.71
RDNRaiden Resources1323-275750.027 $ 32,732,185.89
SNGSiren Gold13-410.405 $ 24,824,347.02
SRNSurefire Rescs NL13-4-1012500.027 $ 26,331,849.84
RSGResolute Mining12-16-46-460.52 $ 557,465,816.53
CAZCazaly Resources129-41240.047 $ 16,630,347.02
CMMCapricorn Metals1213-2471.79 $ 623,221,866.13
STKStrickland Metals127-73710.022 $ 9,686,484.98
KAUKaiser Reef11-6-171000.34 $ 30,010,589.74
PRUPerseus Mining1110-4271.33 $ 1,563,732,509.25
AQXAlice Queen11-23-38-90.02 $ 20,834,707.81
AYMAustralia United Min110-474000.01 $ 18,425,774.85
DGODGO Gold Limited11231893.55 $ 255,960,083.04
NAGNagambie Resources1056481000.086 $ 42,994,181.76
FFRFirefly Resources10-8-314560.11 $ 32,270,650.65
RMXRed Mount Min100-152670.011 $ 13,764,547.38
PF1Pathfinder Resources10170.275 $ 13,674,152.25
EM2Eagle Mountain10741247950.895 $ 150,275,096.66
MBKMetal Bank9991510.012 $ 13,029,591.34
BTRBrightstar Resources9-25298000.036 $ 14,511,775.21
CDTCastle Minerals90-81000.012 $ 7,325,008.18
KRMKingsrose Mining9037660.048 $ 34,310,345.54
SPQSuperior Resources9005400.012 $ 15,194,693.70
DEGDe Grey Mining93323251.3 $ 1,598,795,315.64
SLRSilver Lake Resource915-2341.86 $ 1,573,611,937.28
SFMSanta Fe Minerals9-9251000.1 $ 7,281,878.90
GBRGreatbould Resources93-41480.038 $ 10,520,899.37
KWRKingwest Resources8-4-32-140.13 $ 21,388,534.83
ZNCZenith Minerals80182170.13 $ 38,266,803.90
WAFWest African Res821-4991.04 $ 900,708,832.50
RMLResolution Minerals817-39-730.027 $ 11,438,385.33
FMLFocus Minerals8-1-22280.31 $ 54,824,569.50
AMGAusmex Mining Gp8817270.056 $ 31,040,563.62
AUTAuteco Minerals89-322060.098 $ 148,881,998.92
OKUOklo Resources8-20-52-440.14 $ 68,044,024.62
GSNGreat Southern8-2-38330.057 $ 25,481,143.52
HMXHammer Metals791394250.105 $ 78,759,113.16
MRZMont Royal Resources715-121140.3 $ 9,963,261.00
GORGold Road Res79-14-261.3 $ 1,114,314,007.07
DCNDacian Gold7-61-40.385 $ 308,318,263.38
YRLYandal Resources69-11510.495 $ 44,075,993.70
RMSRamelius Resources614-21541.75 $ 1,400,109,697.52
M2RMiramar6190.25 $ 9,923,467.20
WGXWestgold Resources.611-16112.32 $ 957,912,910.20
ARLArdea Resources616910.525 $ 66,388,702.64
SVLSilver Mines Limited6-161470.22 $ 249,342,240.63
OKROkapi Resources6002270.18 $ 8,856,137.16
HAWHawthorn Resources6-28-49-430.056 $ 18,676,874.33
RXLRox Resources53-35560.039 $ 89,836,338.73
BARBarra Resources5-5-26430.02 $ 12,874,553.92
MATMatsa Resources5-10-45-270.08 $ 21,420,590.01
CLACelsius Resource5-1383000.04 $ 33,448,287.08
IDAIndiana Resources512383430.083 $ 23,845,070.14
NCMNewcrest Mining514-12-527.7 $ 21,944,228,230.20
CBYCanterbury Resources50-21570.11 $ 12,305,171.67
PAKPacific American Hld5-85500.022 $ 7,008,867.80
CHNChalice Mining5471125266.48 $ 2,227,107,197.56
HRZHorizon515-4770.115 $ 70,996,900.00
TMZThomson Res5-18445350.115 $ 52,269,108.97
CYLCatalyst Metals5-2-21-52.09 $ 205,438,061.07
DEXDuke Exploration4110.35 $ 20,212,898.69
KCNKingsgate Consolid.410121030.935 $ 209,258,994.50
KZRKalamazoo Resources40-27-110.47 $ 58,054,230.96
AL8Alderan Resource4-10-453730.071 $ 21,153,817.53
ARVArtemis Resources417-372960.095 $ 105,719,081.48
AAJAruma Resources429-401400.072 $ 7,629,186.74
TARTaruga Minerals46-314560.05 $ 21,945,672.29
ICGInca Minerals4181413510.13 $ 46,392,426.00
MTCMetalstech4-21-21-160.135 $ 18,320,954.75
NSTNorthern Star420-30-1411.19 $ 12,669,889,031.91
CWXCarawine Resources4-192450.275 $ 28,855,824.03
GMLGateway Mining4-6381230.029 $ 53,301,796.80
CELChallenger Exp32411820.31 $ 168,490,289.60
TSOTesoro Resources30-623190.19 $ 94,909,562.85
EVNEvolution Mining313-25-74.59 $ 7,552,308,515.70
BMOBastion Minerals3-30.195 $ 10,916,309.40
TBRTribune Res29-26-55.41 $ 284,376,977.34
HCHHot Chili2-4181440.045 $ 141,566,272.59
GULGullewa Limited22-161040.092 $ 16,778,325.20
WWIWest Wits Mining2-121427360.092 $ 126,095,076.45
SSRSSR Mining Inc.25-2420.48 $ 357,561,580.26
ALKAlkane Resources21-47-170.735 $ 428,679,936.00
BC8Black Cat Syndicate25-8860.745 $ 78,357,493.57
M24Mamba Exploration2140.28 $ 9,990,000.00
A1GAfrican Gold .212812180.28 $ 25,496,196.32
ADTAdriatic Metals222832.26 $ 408,446,864.28
PGDPeregrine Gold20.285 $ 7,796,661.21
BDCBardoc Gold1-5-5110.073 $ 123,203,273.70
XAMXanadu Mines145761470.074 $ 80,796,272.63
LCLLos Cerros Limited150-96500.19 $ 84,825,189.00
MOHMoho Resources1-1-2700.08 $ 8,244,612.16
MKGMako Gold1-6-171070.091 $ 23,408,985.78
BGLBellevue Gold117-26640.91 $ 762,088,277.07
SBMSt Barbara Limited05-30-162.12 $ 1,465,609,243.23
OZMOzaurum Resources0-80.18 $ 9,883,800.00
DLCDelecta Limited000500.006 $ 7,060,348.44
TRMTruscott Mining Corp0053200.021 $ 2,686,772.42
GMRGolden Rim Resources025-44670.01 $ 26,703,496.79
GMNGold Mountain03-2-200.04 $ 29,006,734.54
GNMGreat Northern0-9-501000.01 $ 10,579,196.04
ERMEmmerson Resources09-1570.075 $ 36,371,409.70
ALYAlchemy Resource033-27490.016 $ 10,755,895.25
FAUFirst Au00-161000.016 $ 9,814,060.06
WCNWhite Cliff Min0-5-285000.018 $ 9,309,535.18
AWVAnova Metals04-111840.025 $ 35,827,355.00
PRSProspech Limited0-7000.125 $ 8,127,573.63
BYHBryah Resources025151690.07 $ 10,747,835.56
MEGMegado0-30.17 $ 6,935,795.66
MAUMagnetic Resources02231261.58 $ 341,550,775.66
DCXDiscovex Res0001330.007 $ 17,980,648.53
KGMKalnorth Gold0003330.013 $ 11,625,120.78
KTAKrakatoa Resources0-8-41450.058 $ 16,737,000.00
LNYLaneway Res00-14330.006 $ 22,650,395.60
MLSMetals Australia0-2001000.002 $ 8,454,376.09
TNRTorian Resources0-22802910.045 $ 36,060,788.02
XTCXantippe Res0-33-33-330.002 $ 8,149,128.80
MEUMarmota Limited0-4-6190.044 $ 43,584,016.05
PNRPantoro Limited0-5-17700.195 $ 274,637,654.46
MMLMedusa Mining0-61540.84 $ 171,495,473.33
NXMNexus Minerals0-5-371280.091 $ 22,217,802.06
EMREmerald Res NL00301050.81 $ 412,317,765.60
TTMTitan Minerals0-9-26490.1 $ 110,526,886.10
MHCManhattan Corp0-22-521800.014 $ 21,367,901.70
BATBattery Minerals0-16503200.021 $ 42,866,744.36
CTOCitigold Corp0-8-202000.012 $ 36,140,000.00
RNDRand Mining08-30-61.62 $ 97,440,529.50
CAICalidus Resources0-10-37390.42 $ 165,970,441.98
MTHMithril Resources0-5-402000.018 $ 42,304,194.74
VANVango Mining018-14-390.085 $ 86,797,855.28
MCTMetalicity Limited0-13-432750.013 $ 22,972,615.32
WMXWiluna Mining Corp-1-7-44-91 $ 126,215,506.00
STNSaturn Metals-117-44190.415 $ 46,110,449.10
AGGAngloGold Ashanti-2-1-26-235.77 $ 500,455,561.65
TINTnt Mines Limited-2-6-302230.155 $ 14,945,596.00
WRMWhite Rock Min-229500.6 $ 42,897,297.56
CSTCastile Resources-238-391320.255 $ 50,926,080.86
AUCAusgold Limited-24-72570.05 $ 65,017,477.05
PRXProdigy Gold NL-210-4250.045 $ 26,708,869.88
AXEArcher Materials-2-15764330.88 $ 201,172,525.94
REZResourc & En Grp-211373100.041 $ 16,835,550.77
ZAGZuleika Gold-2-5-2860.041 $ 16,813,828.29
HWKHawkstone Mng-2142155830.041 $ 67,023,792.24
NSMNorthstaw-3-11-80.39 $ 15,600,000.00
NWMNorwest Minerals-3-7-22-540.076 $ 8,707,214.32
ANXAnax Metals-342034120.074 $ 25,213,240.08
VMCVenus Metals Cor-3-3-29-30.18 $ 27,194,162.94
TRYTroy Resources-31-54-140.071 $ 53,029,463.76
AGCAGC-300.17 $ 11,513,638.28
AGCAGC-300.17 $ 11,513,638.28
AOPApollo Consolidated-3-8-3530.33 $ 92,358,588.80
AGSAlliance Resources-3-11-24980.165 $ 34,322,827.11
MZZMatador Mining-38-291030.325 $ 55,586,978.88
CY5Cygnus Gold Limited-3-6-182900.16 $ 17,347,215.68
TIETietto Minerals-3-11-43160.315 $ 141,107,491.36
S2RS2 Resources-3-9-50500.15 $ 45,659,220.96
MEIMeteoric Resources-3-1542870.058 $ 74,943,117.72
NMLNavarre Minerals-3-6-28650.145 $ 79,205,111.90
MKRManuka Resources.-314-120.435 $ 40,121,951.52
BRVBig River Gold-38-151020.42 $ 89,922,456.65
PURPursuit Minerals-44062520740.081 $ 71,355,868.36
ASOAston Minerals-4652029000.13 $ 113,320,665.77
PUAPeak Minerals-44-241340.026 $ 15,982,268.95
SMISantana Minerals-4-4-38-380.13 $ 14,824,242.68
NUSNusantara Resources-40-13160.26 $ 59,610,981.82
TAMTanami Gold NL-4-107810.076 $ 89,307,375.50
OBMOra Banda Mining-42-26490.25 $ 214,766,599.04
MGVMusgrave Minerals-49-372040.365 $ 197,292,491.13
BNRBulletin Res-4-3-3890.07 $ 12,550,515.18
GEDGolden Deeps-415-26640.0115 $ 8,523,365.84
MRRMinrex Resources-40-19570.022 $ 11,573,878.16
IPTImpact Minerals-5-19-162000.021 $ 37,398,615.26
SVYStavely Minerals-5-159450.63 $ 157,881,678.46
OAUOra Gold Limited-5-9-16620.021 $ 20,180,285.33
NMRNative Mineral Res-5-30.29 $ 8,355,915.00
DREDrednought Resources-512-422800.019 $ 45,476,948.82
GRLGodolphin Resources-5-5-24730.19 $ 15,980,980.18
ADNAndromeda Metals-5-341047330.275 $ 594,200,152.43
GIBGibb River Diamonds-5-10-451630.071 $ 15,863,208.38
LEXLefroy Exploration-51204127311.33 $ 162,613,098.79
BCNBeacon Minerals-6-62100.034 $ 121,693,088.29
ADVArdiden-6-15-474670.017 $ 34,389,667.46
IVRInvestigator Res-6-8534400.081 $ 107,239,675.17
BNZBenzmining-630.8 $ 26,676,529.43
ENREncounter Resources-63-50600.16 $ 50,490,192.48
NVANova Minerals-6-6552880.155 $ 250,491,997.05
EMUEMU NL-6-21-41420.046 $ 19,948,237.73
THRThor Mining PLC-6702750.015 $ 7,543,343.91
TRNTorrens Mining-6-170.145 $ 9,843,243.37
GSMGolden State Mining-7-3-53570.14 $ 11,584,770.12
CHZChesser Resources-7-21-491010.135 $ 60,952,786.88
DTMDart Mining NL-7-29-211790.135 $ 13,492,639.26
CXUCauldron Energy-78141110.04 $ 18,079,980.48
VKAViking Mines-7-31148000.039 $ 36,405,892.80
AAUAntilles Gold-7-191413050.089 $ 16,587,040.17
MVLMarvel Gold Limited-84-321020.049 $ 25,940,846.96
SIHSihayo Gold Limited-80-52-40.012 $ 44,225,536.96
RDSRedstone Resources-80-202000.012 $ 7,908,989.69
RVRRed River Resources-8-10192330.22 $ 111,321,488.91
SAUSouthern Gold-96-29-370.085 $ 18,132,944.26
G88Golden Mile Res-9102543040.105 $ 13,206,741.16
AWJAuric Mining-9180.2 $ 8,098,567.60
AARAnglo Australian-98-41-260.1 $ 58,900,838.40
PKOPeako Limited-915-91920.03 $ 5,761,625.31
MDIMiddle Island Res-10-11-3620.235 $ 28,762,999.61
RRLRegis Resources-10-5-45-312.73 $ 1,380,698,061.95
DDD3D Resources Limited-10-9-92630.0045 $ 18,101,860.46
DTRDateline Resources-1029801250.0045 $ 35,324,312.30
KSNKingston Resources-100-12570.22 $ 62,422,128.12
SI6SI6 Metals Limited-11-16237000.016 $ 23,681,216.99
KAIKairos Minerals-1128-592430.032 $ 51,969,668.64
SLZSultan Resources-12-3-121770.18 $ 12,863,861.97
RGLRiversgold-122-225250.05 $ 19,977,109.80
AQIAlicanto Min-130-48940.105 $ 34,326,333.41
AVWAvira Resources-130-132500.007 $ 9,625,280.00
CGNCrater Gold Min-14-2158730.019 $ 24,549,917.34
SBRSabre Resources-1433-405000.006 $ 10,098,381.89
MSRManas Res-140-252000.006 $ 19,321,915.19
TSCTwenty Seven Co.-14-8-2500.006 $ 11,707,034.07
AZSAzure Minerals-149-82860.355 $ 104,749,145.14
HXGHexagon Energy-15-18129590.094 $ 37,016,768.15
TMXTerrain Minerals-1510-211750.011 $ 8,829,132.11
NESNelson Resources-20-2481690.084 $ 11,928,801.74

 

Small Cap Standouts

NEW AGE EXPLORATION (ASX:NAE) +31%

The explorer has kicked off an early stage, pre-drilling survey in the Central Pilbara gold district in WA.

This tenure is next door to Novo’s (TSE:NVO) Egina gold project and less than 50km from De Grey’s (ASX:DEG) colossal Hemi discovery.

Most of the ground is under cover and has received little attention from historical gold prospectors, NAE exec director Joshua Wellisch says.

“We are excited to see the results in the coming weeks in the lead up to our maiden drill program to the North,” he says.

 

ORMINEX (ASX:ONX) +24%

In December, this former struggler sold 50% of its undeveloped 248,000oz Penny’s Find gold mine for $1.5m to Horizon Minerals (ASX:HRZ), which will shell out another $1m to fund early development.

The JV has now reported multiple significant drilling intercepts testing for the edges of this gold system, including 5m @ 5.27g/t gold from 180.3m and 3.7m @ 7.46g/t gold from 215.3m.

“The first round of high-grade drilling results demonstrating multiple areas of significant width are a testament to the calibre of the Penny’s Find gold deposit and we very much look forward to receiving results for the remaining 8 holes of this program, expected in the current June quarter,” Orminex director Dean Hely says.

 

RESOLUTE MINING (ASX:RSG) +12%

Another goldie which has struggled over the past year.

The share price of gold miner Resolute was spanked last month when Ghana decided to cancel its mining licence at the undeveloped Bibiani gold mine.

This happened just as Resolute was in the process of selling it to Chinese company Chifeng for ~$US105m.

That mining licence has now been restored “to maintain investor confidence globally and in particular maintain Ghana’s reputation as the preferred destination for mining investment in Africa”, the company says.

The share price is still down 46% over the past year, making Resolute the third worst performer in that period.

The post Gold Digger: Geopolitical tantrums help, but they aren’t the main reason gold prices will recover later this year appeared first on Stockhead.

Barry Stroman was a reporter for Zerg Watch, before becoming the lead editor. Barry has previously worked for Wired, MacWorld, PCWorld, and VentureBeat covering countless stories concerning all things related to tech and science. Barry studied at NYU.

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