The Gold price has stabilised somewhat following last week’s spectacular rise, which saw three consecutive daily highs break the all time record. In electronic trading in the December Comex contract was trading whisker below Thursday’s new all time high, Gold futures are changing hands around $1,058.
As investors evaluate the current price action in the gold market analyst sentiment is beginning to become conflicted with some pointing to an overbought yellow metal. On Friday a new monthly investment strategy report from CIBC, ‘Global Positioning Strategies’ seemed downbeat on the gold rally’s sustainability. According to CIBC the main factors behind Gold’s recent surge were fading off with investor worries easing and the US Dollar being poised for a “relief rally” in the next two or three months, having “overshot to the downside.”
On the other hand more bullish analysts are expecting a sustained rally; some even expect that Gold will rise a further 10% from today’s record breaking high, with prices speculated to reach between $1,100 - $1,300 an ounce before the end of 2009.
Over recent weeks, as the rally has developed an ever-growing profile among finance commentators, the Gold market’s commercial participants have also weighed in with their comment and projections. Barrick Gold (NYSE, TSX: ABX) announced earlier this year that it would end its hedging strategies, as they were confident in the long term outlook of the gold price.
More recently Lihir Gold (ASX, TSX, NASDAQ: LGL) also joined the debate. In reports over the weekend Australia’s second largest gold producer identified US$1,500 as a potential future gold price, citing increasing future Chinese & Central Bank demand.
It has been a mixed session however for Gold shares in London this morning. Diversified precious metals miner and developer Petropavlovsk (LSE: POG) gain 1%, while Randgold Resources (LSE:RRS, NYSE: GOLD) and Canadian based Yamana Gold (LSE: YAU, TSX: YRI, NYSE: AUY) were relatively unchanged.
On the AIM market the performance of the juniors has been decisively uneven. On the positive, several stocks have been particularly strong, in particular, Central China Gold (AIM: GGG), which advanced 16% extending last week’s gains.
Similarly Asia-Pacific explorers Metals Exploration (AIM: MTL) gained almost 10%, while Canadian based Rambler Metals & Mining (AIM: RMM, TSX: RAB) rose 9%.
Medusa Mining (AIM & ASX: MML) advanced 4.5%, Pan African Resources (AIM: PAF) gained 3%. Meanwhile Tajikistan operating Kryso Resources (AIM: KYS), Fijian gold producer Vatukoula Gold (AIM: VGM) and Centamin Egypt (AIM & TSX: CEY) all rose up to 2.5%.
Elsewhere Ariana Resources (AIM: AAU) fared less favourably slipping slightly, as did Mercator Gold (AIM: MCR), Nyota Minerals (AIM & ASX: NYO) and Solomon Gold (AIM: SOLG).