Gold started the week on a positive note with Friday seeing a nice move to the upside.
Goldman raised their 12 month gold forecast by 11% to $2000 oz, you can read more here but the crux of it is the investment bank have upped a number of their gold forecasts citing lower interest rates, concerns over currency debasement and economic uncertainty as drivers.
Looking at the chart, it looks like we could be about see see a nice break-out although perhaps a short cool-off before that happens if you look at the RSI.
Goldman upping their forecast for the next 12 months and the general consensus gold is heading higher has prompted me to start looking a little deeper into some gold plays.
I have a few on the list, in fact I nearly pulled the trigger on Hummingbird Resources mid-week, got distracted, came back a day later and it had moved. I’ll be keeping an eye on it as I like the progress the company have made an their ambition.
Whats caught my attention though is the flurry of Chinese companies buying up gold projects, many of those recently in Canada.
Zijin Mining Group Co. Ltd. agreed to buy Guyana Goldfields Inc (TSX listed) for an all cash offer on Friday for $323m. Zijin have been buying up projects that are either in production or due to commence production soon.
Shandong Gold Mining Co. Ltd. have also been on a buying spree snapping up Canadian TMAC Resources Inc. for a deal totalling $149m.
Interesting for me though is Shandong have also agreed to buy Ghana focused Cardinal resources for $221m. We’ve seen a swathe of Canadian M&A are we going to see a similar situation for African based gold plays?
In my recent blog article I highlighted under the radar Goldstone Resources which as it happens has two projects in Ghana, one due to start producing this year and both in a very prospective area offering exploration upside with some huge grades on offer. Could they be a target in due course? I’ll be publishing a Goldstone research note shortly!
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