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MoneyTalks: Gold price could hit as high as US$2,000/oz amid geopolitical tensions – here are 4 stocks to watch
Money Talks is a regular drill down into what stocks investors are looking at right now. In this article Money Talks taps into the expertise of Peak Asset Management founder and executive director Niv Dagan … here is what he had to say …
What’s hot right now?
The gold price has picked up on the back of geopolitical tensions in Europe and higher inflation globally.
“US inflation has surpassed 7.5% which is the highest it has been in 40 years, the UK inflation numbers are at 5.5% and our inflation is above 3.5% – which is higher than the 2-3% the RBA was expecting,” Dagan says.
“We are seeing supply disruptions and cost blowouts, combined with a huge parallel in terms of volatility, which is driving large investor inflows into gold.
“At the same time there is a weakening US dollar, which is negatively correlated with commodities, so when the US dollar starts to fall, commodities traditionally have outperformed.’’
“On top of this, we are expecting central banks to unwind their stimulus and bond buying so we have a ‘perfect storm’ – investors are looking to diversify to safety where gold and crypto currencies are strongly correlated.”
Dagan says he expects the gold price to hit US$2,000/ounce in the next six months.
Top picks
“BOA have a huge land holding in the Paterson region in WA adjacent to Newcrest and Rio Tinto that they are looking to drill out next month,” Dagan says.
“Total granted Paterson Province tenement holding is now 607km2. The company has identified multiple internal dome features, strengthening the Telfer dome lookalike structure of the target.
“This would be a big catalyst to the stock.
“They are early stage but from an exploration perspective, Newcrest is sitting on a huge producing mine, so all the infrastructure and upside we feel is there.”
