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    Shares in Evolution and the rest of the listed Australian gold sector have been hit hard for a second day on global interest rate rise fears.
    But at a Melbourne Mining Club luncheon on Thursday, Evolution’s executive chairman Jake Klein argued that if anything, the gold price is in the early stages of a bull cycle.
    He was speaking as the market took another 10c, or 4.3 per cent, off Evolution’s share price, leaving it at $2.23 at the close of trade. That followed on from Wednesday’s 20c, or 7.9 per cent, share price hit after gold suffered its biggest single day fall in three years, plunging $US43 an ounce to $US1269 an ounce.
    In Asian markets late yesterday gold was trading nervously at $US1267 an ounce; with the apparent absence of a rally back towards $US1300 an ounce prompting investors to take profits off the table, with gold equities on average up by more than 100 per cent for the year ahead of Wednesday’s gold price hit.
    The exit could be shortsighted, according to Mr Klein. He noted that during the past 45 years there have been seven bull markets and seven bear markets for gold. On average, from the bottom of bear market to the top of the bull market, gold equities have risen by 500 per cent, and up to 760 per cent in full blown bull markets.
    “So if we are in a traditional bull cycle like the last seven — and I don’t think there is any reason to believe we are not — there is still likely a long way to go for gold equities,’’ Mr Klein said.
    He also argued that gold investors’ fears of a US interest rate hike in December had to be put in to perspective.
    “Since the GFC in 2008 there have been more than 600 rate cuts by central bankers and we find ourselves in an unprecedented low interest rate environment.’’
    “Yet, in spite of this, market participants seem obsessively focused as to whether the Federal Reserve will increase interest rates by 25 basis points at their meeting in December which would be only the second increase in US interest since the down cycle began in 2007,’’ Mr Klein said.
    Other factors Mr Klein said gave rise to a favourable environment for the gold price and gold equities was the US election.
    “Whilst no one outside of Fox News seems willing to contemplate or even acknowledge it, the reality is that come November, Donald Trump could be the next president of the US,’’ Mr Klein told the crowd of 550 at the Melbourne town hall.
    Later he agreed that uncertainty around the election result could increase volatility in the gold price to the upside.
    “It is a two-candidate race. And whilst everyone is pretty much ruling out a Trump victory, no one really gave Brexit a chance either,’’ Mr Klein said.
 
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