Top Stories This Week: Gold Hits Lowest Price Since Mid-2020, Previewing PDAC

The gold price continued to sink this week, falling below the US$1,700 per ounce mark for the first time in 2021. It remained there at the time of this writing on Friday (March 5) afternoon.

Once again, the precious metal‘s decline has been blamed on factors including a stronger US dollar and better US Treasury yields. The 10 year Treasury is a closely watched indicator, and yields have been increasing fairly steadily this year; they rose above 1.6 percent this week.

Treasury yields move inversely to Treasury prices, and prices for the government bonds took a hit on Thursday (March 4) as US Federal Reserve Chair Jerome Powell said the central bank wants to see inflation “sustainably above 2 percent.” At this time, he doesn’t expect that to happen this year.

Inflation is damaging for bond prices because if market watchers think inflation is coming, bond yields will rise and prices will decrease. Even though gold is typically viewed as a hedge against inflation, right now experts appear to agree that the metal is not getting support from inflation concerns.

“We’re very mindful and I think it’s a constructive thing for people to point out potential risks (concerning inflation). I always want to hear that.

But I do think it’s more likely that what happens in the next year or so is going to amount to prices moving up but not staying up and certainly not staying up to the point where they would move inflation expectations materially above 2%” — Jerome Powell, US Federal Reserve

Speaking to me this week, Peter Grandich of Peter Grandich & Company said that although gold’s correction has gone on longer than he expected, he believes it’s close to an end.

Overall, he thinks the yellow metal is still only about four or five innings into a nine inning game, with a downside risk of US$100 and an upside reward of US$500 to US$1,000.

“The gold market may be in the fourth or fifth inning of a nine inning game, and I think we’re pretty close to the end of the correction. I would say the risk is US$100 down and the reward is US$500 to US$1,000 up” — Peter Grandich, Peter Grandich & Company

Sharing a few additional reasons the gold price is hurting right now, Peter said that it’s faced headwinds including profit taking and enthusiasm about bitcoin.

The cryptocurrency has of course enjoyed a major run over the last few months, reaching new all-time highs in February and attracting attention from mainstream investors.

As a final point this week, I want to take a moment to talk about the upcoming Prospectors & Developers Association of Canada (PDAC) convention, which runs online this year from March 8 to 11. PDAC is a key event for the mining sector every year, and INN is looking forward to attending virtually.

If you’re attending, you’ll be able to find our team’s booth in the PDAC platform by going to the “exhibits” section and clicking on “media partners.” During the event we’ll be publishing four brand-new video interviews with resource industry favorites Rick Rule, EB Tucker, Frank Holmes and Jeffrey Christian.

You can find those interviews on the PDAC platform, and we’ll also be publishing them on our YouTube channel. Stay tuned, and turn on your notifications if you’d like to see them right away.

Want more YouTube content? Check out our YouTube playlist At Home With INN, which features interviews with experts in the resource space. If there’s someone you’d like to see us interview, please send an email to cmcleod@investingnews.com.

And don’t forget to follow us @INN_Resource for real-time updates! 

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.