Editor's Picks: Gold Price Slips Below US$4,000, Expert Says US$3,600 Could be Next
With an eye for detail and over a decade of experience covering the mining and metals sector, Charlotte is passionate about bringing investors accurate and insightful information that can help them make informed decisions.
She leads the Investing News Network's video and event coverage, and guides a team of writers reporting on niche investment markets.
Precious metals prices fell below key levels this week, with gold moving under US$4,000 and silver finishing the period at less than US$54.
It was a week of downward momentum for gold, which tumbled from above US$4,100 per ounce to below US$4,000 by the end of the period.
Silver took a hit as well, sinking from close to US$58 per ounce to below US$54.
Those prices represent important levels for both metals.
Investors tend to focus on round numbers when it comes to gold, making US$4,000 key psychologically. When it comes to silver, US$54 is a point that — as we talked about last week — a number of analysts see as technically important to hold.
Gold hasn't been below US$4,000 since July, and while sector participants are blaming this week's declines on a variety of factors, no single element appears to be standing out.
For example, heightened tensions in the Middle East have boosted oil prices once again, but concerns about inflation still seem to be relatively in check.
Currently CME Group's (NASDAQ:CME) FedWatch tool shows the vast majority of market watchers anticipate rates staying steady at next week's US Federal Reserve meeting.
Hike expectations increase substantially for the central bank's December gathering.
A broader rout among tech equities may also be weighing on gold; that said, precious metals don't typically trade in line with the broader stock market.
So will the gold price keep falling? I heard this week from Chris Vermeulen of TheTechnicalTraders.com, who has a bearish near-term outlook for the metal:
"Based on my technical analysis, gold and silver are actually back in a bear market, and they have been for quite a few months. They have a very strong downtrend. We are kind of testing that US$4,100, that US$4,000 mark, and the charts are actually pointing to US$3,600 as the next stop. And we could even see it continue to slide down to about US$4,100, or sorry, US$3,100."
Vermeulen's US$3,100 call is easily the lowest level that's been mentioned recently on our channel, but it's worth noting that he has a much more positive long-term outlook:
"I think everything in this world goes up in value over time, and precious metals is one of those sweet spots where if you can get ... some big selloff discount price, you can buy it. Not only can you make money from the increase in value, but it's also that hedge, that insurance against currencies and government and all that stuff.
"So hopefully, we do get this. The bear market unwinds, we see US$3,100 for gold. Because that's going to be an epic opportunity to purchase and get more involved in the precious metals space for the next big rally. Because I have no doubt precious metals will be over US$10,000, US$12,000 someday."
Moving forward, key dates to watch are next week's Fed meeting, which will run from October 27 to 28, and midterm elections in the US, scheduled for November 3.
Bullet briefing — Eagle finds buyer, New Orleans event
Eagle gold mine finds buyer
Singapore-based firm Boroo has reportedly signed an agreement with PwC to acquire and restart operations at the Eagle gold mine in Canada's Yukon.
Eagle has been offline since mid-2024, when a failure at the site's heap-leach facility created a spill of nearly 6 million cubic meters of ore, with cyanide solution contaminating groundwater in the area.
Cleanup has been in progress since then, and owner Victoria Gold ultimately entered receivership.
Boroo, which also owns mining operations in Mongolia and Peru, has now said it will pay C$140 million for Eagle and spend C$1.5 billion on its restart.
The deal is subject to court approval, which is anticipated by the end of the year.
New Orleans Investment Conference
This week's update is on the short side, but it's for a good reason — our team is gearing up for the New Orleans Investment Conference, which takes place from October 28 to 31.
I'm getting ready to speak to experts like Brien Lundin, who runs the event, as well as favorites on the channel like Lobo Tiggre, Adrian Day, Doug Casey and of course Don Hansen.
If you have any questions you'd like me to ask, or topics you'd like to see covered, please send an email to cmcleod@investingnews.com. And if you're attending the conference, make sure to say hello!
Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures 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.
