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Top Stories This Week: Gold Still Mired in Fed Uncertainty, Busy Juniors Facing Lab Delays
Catch up and get informed with this week’s content highlights from Charlotte McLeod, our editorial director.
The gold price remained below the US$1,800 per ounce mark this week, a level it’s been stuck under for most of the month of August.
It was sitting at around the US$1,780 mark at the time of this writing on Friday (August 20) afternoon, about where it was at the same time last week.
Although gold is trading at historically high levels, many market watchers continue to be disappointed with its performance given the wide range of factors that should be having a positive impact.
I heard this week from Brien Lundin of Gold Newsletter, who said while he feels confident in gold’s long-term prospects, the near term is less certain. He pointed out that there tends to be weakness in the metal when the US Federal Reserve is shifting its messaging, which is what’s happening right now. Once there’s some action from the central bank that should signal a bottom for gold.
“The long-term picture is still good, and I’m very bullish and positive on that. But for gold, its near-term future is much more uncertain than its long-term future” — Brien Lundin, Gold Newsletter
I also had the chance to speak with Joe Mazumdar of Exploration Insights, who shared his thoughts on how junior miners are doing at the halfway point in 2021.
Many were able to raise cash last year, and Joe said this year that money is being put to work — the problem is that there’s so much drilling activity that labs are getting backed up. Instead of seven to 10 day turnarounds, companies are now looking at six to eight weeks for results.
With drilling in focus, I asked Joe what investors should look for when a company they follow is putting together a drill program. In his opinion, it’s important to know what the company wants to accomplish with the work it has planned — in other words, expectations should be different depending on whether the focus is on grassroots drilling vs. confirmation or extension drilling.
“When you set your expectations for a company, you’ve got to know what they’re drilling for. And so if it’s grassroots exploration, almost expect to be disappointed and have a longer time frame that you’re looking at in terms of if this is something that could be significant” — Joe Mazumdar, Exploration Insights
With Joe’s comments in mind, we asked our Twitter followers this week if they’ve been noticing a slowdown in exploration results this summer. An overwhelming majority of around 80 percent said this is a trend they’ve been seeing as well; it’s unclear when the backlog may clear up.
This week we’re going to end with blockchain. INN’s Bryan Mc Govern took a look at where the market stands now that we’re halfway through the year, and unsurprisingly all the experts he spoke with agreed that it’s been a critical year for cryptocurrencies, as well as the technology that powers them.
While bitcoin’s volatility has been a hot topic in 2021, it’s also seen increasing adoption from individuals, businesses and even countries. Notable examples include Tesla (NASDAQ:TSLA), which in February announced the purchase of US$1.5 billion worth of bitcoin, and El Salvador, where lawmakers recently voted to make bitcoin legal tender. Tesla also accepted bitcoin as payment for a brief period of time.
So what’s next for blockchain and cryptocurrencies? Market watchers believe that heading into the rest of the year it will be important to keep an eye on further moves into the mainstream, including new bitcoin exchange-traded products, which are making it easier than ever before to jump in.
“The core reason for (exchange-traded) products is to provide easier access to investing in cryptocurrencies. No question, that’s what we’re doing” — Elliot Johnson, Evolve Funds Group
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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.