Even amid the recent spike higher in real interest rates, %Gold prices have remained resilient according to Morgan Stanley Wealth Management. Their Chief Investment Officer Lisa Shalett noted in a recent report that much like equities, gold continues to shrug off the implications of climbing real rates.
Historically, the price of gold was largely influenced by the price of money. When interest rates decreased, gold prices escalated, and the opposite occurred when rates increased. This is because gold was often seen as a refuge against the volatility of fiat currencies, especially during periods of low interest rates and depreciated dollar values.
However, recent trends have shown a deviation from this pattern. Even with the surge in inflation-adjusted rates to unprecedented levels since the financial meltdown, the gold market hasn’t shown much reaction.
Like equities, which have also remained immune to the negative impacts of real rates, “Gold, which moves inversely to real rates and in turn to the U.S. dollar, has remained extremely resilient,” stated Shalett in the report.
“Regarding the intermediate outlook, we are buyers of gold on weakness or declines in rates,” Shalett added.
The surge in real rates has been driven by several factors, including higher Treasury issuance and credit downgrades. This has forced investors to grapple with the risks of a higher rate regime persisting longer.
Yet gold has held strong despite the half percentage point increase in 10-year real rates over the past six weeks. With the metal tending to move inversely to real rates and the US dollar, this relative outperformance highlights gold’s current investor appeal.
The traditional link between gold and real interest rates is appearing to be supplanted, potentially marking a significant transformation for the metal. So, what is sustaining the high prices? Experts highlight two main factors: aggressive purchasing by central banks, with China at the forefront, and investors who continue to believe that a downturn in the US economy will benefit gold.
Shalett sees room for gold to trend upward in the intermediate term as real rates potentially peak and head lower again. Savvy investors are positioning themselves accordingly – and advanced-stage gold projects in a supportive mining jurisdiction are some of the offerings with the most potential for upside leverage, especially considering their current highly disproportionate valuations relative to asset base.
Such publicly traded gold exploration companies include %I80Gold (TSX: $IAU), %NevadaKingGold (TSX: $NKG), and %GetchellGold (CSE: $GTCH) – with the latter standing out as the company with potentially the highest upside and the lowest market cap out of the pack.
Fondaway Canyon Project – At the Epicenter of US Gold Discovery
Nevada-focused Getchell Gold Corp. (CSE:GTCH, OTCQB:GGLDF, FGA:GG1) stands out due to its consistent exploration success and discovery rate that generated a doubling of the %FondawayCanyon gold project’s resource estimate earlier this year with the Company’s first mineral resource estimate containing over 2 million ounces of gold between Indicated and Inferred resources.
This would be highly compelling on its own, however more significantly is the still untapped potential that remains to be discovered. The mineralization at Fondaway Canyon remains open in multiple directions with strong gold grades intersected in the most peripheral holes drilled to date. This, and a recent video produced by the Company (Fondaway Canyon Gold Project – Upside Potential), illustrates the immense upside given the deposit’s extents have yet to be defined.
Aiming to build on this exploration success, Getchell recently received permits for 12 additional drill pads. With much of the large deposit still untested, these new pads will provide the flexibility for aggressive step-out drilling intending to substantially expand the resources even further.
Getchell’s most recent landmark opens the gates for European investors: the Company is now trading in the Frankfurt Stock Exchange under symbol GGA1 (FRA:GGA1).
“We expect the Frankfurt listing will assist in increasing trading liquidity and also facilitate potential investment in the Company by institutional and retail investors across Europe.” Wagener, Chairman and CEO, commented as part of the pertaining press release. “The listing on the Frankfurt Stock Exchange, with its knowledgeable investor base traditionally very active in the junior gold mining sector, will complement our listings on the Canadian CSE and United States OTCQB and heighten the Company’s exposure across these major marketplaces.”
Despite major resource growth and glaring upside potential, Getchell retains a US$12 million valuation. As gold fundamentals strengthen amid economic uncertainty, Getchell warrants strong consideration by investors seeking overlooked leverage.
About Getchell Gold Corporation
Getchell Gold (CSE: GTCH | OTCQB: GGLDF | FGA:GGA1) is a publicly listed gold exploration and development company delineating a potentially Tier-1 gold resource at its flagship Fondaway Canyon project in Nevada, USA. Following consecutive successful drilling programs from 2020 to 2023, the company has effectively doubled the size of the historic resource, placing the Fondaway Canyon project firmly into the multi-million-ounce resource category. Getchell Gold is perfectly positioned to continue expanding its resource with plans to rapidly advance towards a Preliminary Economic Assessment.
Getchell’s highly experienced management team is systematically advancing the Company’s flagship Fondaway Canyon gold project, a major asset located in the nation’s premier global mining jurisdiction of Nevada. Led by CEO William Wagener, possessing over 45 years of global mining expertise, and President/Director Mike Sieb, a senior executive with over 30 years’ experience, Getchell’s leadership offers a proven track record in the resource sector. This veteran mining team remains focused on continuing to unlock value at their NV deposit.
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