In most of the scenarios involving international tensions causing financial and political uncertainties, globally, prices of precious metals are impacted positively. As investors seek haven in gold owing to protection offered by the yellow metal against equity market turmoil, it is usually impacted the most.
Gold is a sought-after commodity for investment, already proved by the considerable increase in its price over the past 50 years. In 2019, gold enjoyed a stellar performance and as an investment vehicle delivered a return of around 19% and this year (2020), gold prices are expected to grow further, supported by solid investor demand amidst ongoing uncertainties in the global market.
Gold Surges on US Killing of Top Iranian Military Commander
On 3rd January 2020, gold rallied after the US killing of Major General Qassem Soleimani, a top military commander of Iran, in an airstrike in Baghdad. US Secretary of State defended the strike by calling it an aim towards disrupting an imminent attack that would have endangered the lives of Americans in the Middle East region, while Iran promised harsh revenge. The sudden spike in gold prices after the event reflected how investors flock to the safe haven asset over any geopolitical uncertainty.
What to Expect from Major Geopolitical Events in 2020?
In 2020, the market seems to be already underpinned with a lot of news in terms of a possible phase one trade deal between the United States and China during mid-January 2020, Hong Kong protests stemming from the extradition law, scheduled US presidential elections, newly elected UK Prime Minister Boris Johnson’s expected resolve towards Brexit, among others.
All these events are among the main drivers that would keep the prices of previous metals like gold supported and well positioned during the year.
Moreover, recent data from the World Gold Council highlighted that 14 central banks added over 1 tonne of gold to their reserve.
Technical Charts Pointing to Gold Uptick
XAUAUD Weekly Chart (Source: Thomson Reuters)
The bullish flag breakout as depicted in the above chart, supports a grand rally for gold in the coming times. The bullish flag pattern supports an upward movement of 25%, and an ounce of gold holding potential to trade close to $ 2,800.
As various geopolitical and macro factors could impact gold prices, investors are required to closely monitor the economic data to have confidence over the technical indication.
While the gold market is looking bullish, investors seeking an indirect exposure to the commodity might consider gold stocks listed on the Australian Securities Exchange. Several ASX gold exploration and mining companies are currently under the expansion phase with number of exploration activities fuelling over the outlook of gold during 2020.
Alice Queen – Strong Project Pipeline with Growth Opportunity
With such a favourable scenario, players operating in the related space have tremendous opportunities to unfold. Let us take you through one ASX-listed advanced gold and copper exploration company, Alice Queen Limited (ASX: AQX), which is primarily focused on flagship gold project - Horn Island in Queensland, in addition to projects in New South Wales, namely Yarindury and Mendooran.
Interesting Read: A 360-Degree View on Gold; Alice Queen Riding High on Legacy Asset Class
2019 saw Alice Queen entering into an earn-in and joint venture deal concerning its flagship project, for which the company recently unveiled high priority targets for follow up, based on an airborne geophysical survey and surface soil sample program. Additionally, the company announced enhanced prospectivity of the Yarindury and Mendooran projects in the North Molong Belt, owing to a significant discovery in the nearby area.
2020 is of extreme importance for Alice Queen, as it intends to progress towards a bankable feasibility study (BFS) with the commencement of studies on the existing open pit mining opportunity at the flagship project. Meanwhile, the company is working towards increasing its target inventory across the Northern Molong Belt Projects (Yarindury EL8646, Mendooran Exploration Licences - 8565, 8469 and 8563).
AQX Delivering Over 160% in Last 6 Months
Backed by an experienced team of mining executives and a huge investor base, Alice Queen has delivered excellent returns of over 160% in the last six months and more than 60% in the last one year on ASX. On 6th January 2020, the AQX stock closed the day’s trade at $ 0.026 with a market cap of $ 23.49 million.
Such high returns reflect investors’ belief in the prospect of project portfolio of Alice Queen Limited.
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