Ann: Encouraging Gold Intersects at Bronzewing South, page-30

Gold prices declined significantly yesterday, and madelows close to levels of around $1850 per ounce. The decline in the gold pricereflects the following factors:

i) Removalof US election uncertainty.

ii) COVID-19Vaccine developments.

iii) Highlyconsensual and heavily populated long gold positions.

Investorswere quick to reduce gold positions and will now likely rotate assets towardscyclical equities where you can make a fast buck. Reducing gold positions inportfolios helps to free up space, and this gives room to allocate funds toother investments in the short term. These moves are consistent with standardbehavioural finance theory.

I note thatthe underlying factors which drove gold prices higher are still in play.Central banks continue to ease policy aggressively (BoE, ECB, RBA and the Fed),the USD looks set to weakenmaterially in the coming months, and real interest rates will remain atnegative levels over the medium to long term. The bottom line is thatallocations towards gold still make sense overthe medium to long-term.

I maintaina broadly constructive stance on gold over the medium-term, and if prices movetowards levels of around $1,800 per ounce, this is definitely in the buy zone.Investors will likely look to increase gold holdings around those levels.

Theeuphoria about the vaccine has already evaporated somewhat. The solution is notas easy as one might think and Covid will therefore still accompany us for12-18 months (unfortunately). The trial is not yet finished either. There maybe setbacks. Worse could be side effects or only a short period ofeffectiveness of the vaccination in practice. If disappointment meets hope, theeffect would be devastating.

Ultimately,however, it is all about what the central banks and the various countries do torevive the economy and reduce debt (if at all desired). The only way to do thisis through inflation. The FED has already paved the way for this.

So, I stickto it: Gold is unlikely to jump above the US$ 2000 mark today or tomorrow - Iam thinking more of the end of Q1 2021 - but in the end there is not much thatspeaks for a substantially weaker gold price. Rather the opposite is the case.

So, I staycalm and follow the whole development. No reason to sell…..and POG is alreadyrecovering somewhat today.

Apart from that Hammer is an explorer and not a producer. A high POG or CU price naturally looks like nitrous oxide injected into the engine of a racing car. But in the end, you have to find gold and copper in the right quantities to make anything happen. It takes patience here. Q1 2021 we know more.