Smart money eyeing near-term gold producers in hope of 2024 bullion breakout

By Barry FitzGerald
Posted onSeptember 21st, 2023

Hopes that the ASX gold sector would start to win back the limelight from the lithium sector in response to the gold price reaching multi-week highs have been put on hold thanks to a more-hawkish-than-expected stance on interest rates by the US Federal Reserve.

While the US central bank left rates unchanged as expected, it did signal that another rate hike was possible before the end of year. Gold which was trading around $US1,950/oz, promptly retreated to below $US1,930/oz.

It made for a tough day on Thursday for the gold producers. But fear not, the near-term producers generally had a good day out, presumably on the belief that US Fed can only play with fire for so long, and that the interest rate shackles on the gold price will be gone by the time they get into production.

Mind you, the Aussie gold price of more than $A3,000/oz should be all the encouragement needed for them to get into production, and for investors to return some love to the sector. The Aussie price remains firmly in record territory at a time of easing inflationary pressures on the industry.

It is not a lithium-type flood, but there are clear indications that selective buying of the near-term producers in preference to the fully priced producers is underway to capture the greater leverage they offer to what could be a break-out year for the gold price in 2024.

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