In spite of gold reaching over $3000 in local currency terms due to signs of inflation peaking, many ASX-listed gold developers have not seen their shares rise accordingly. Although Newmont saw a jump this week, it is still down over 10% since its listing in October. Terra Capital, Paragon Funds Management, Victor Smorgon Group, and Collins St Asset Management have all entered the sector recently, with a specific focus on the mid-cap gold mining sector.
On the other hand, Chester Asset Management’s portfolio manager Anthony Kavanagh has been increasing the firm’s exposure to gold, holding companies like Genesis Minerals, Westgold Resources, and Spartan Resources. He mentioned that while there were fewer buyers in the sector, cost inflation continues to impact the industry.
Kavanagh highlighted the shift in the value of gold, noting that what was once considered a good number for Australian gold producers at $1000 per ounce has now shifted to $1500-$1700 in just a few years. He remains optimistic about gold’s long-term prospects due to concerns over deficit spending in the US and sees gold as a store of wealth and an insurance mechanism.
Citi’s senior commodities’ strategist Aakash Doshi, however, has revised his bullish stance on gold following a recent spike in prices. He suggests investors take profits after the weekend surge, attributing the rise to renewed concerns of a banking crisis in the US.
Despite these differing views, gold remains a popular hedge against potential economic uncertainties. The recent ruling allowing former President Donald Trump to remain on the presidential ballot in Colorado has only added to the growing risks around the US election. As spot gold continues to climb, reaching its highest point since December, the future of the precious metal remains uncertain yet intriguing for investors.
