April 1st, 2021 | 11:15 CEST
JinkoSolar, Goldseek Resources, Barrick Gold - Is this the bottom?
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"[...] We quickly learned that the tailings are high-grade, often as high as 20 grams of gold per tonne; because they are produced by artisanal miners, local miners who use outdated technology for gold production. [...]" Ryan Jackson, CEO, Newlox Gold Ventures Corp.
Under fire in the short term
Gold investors must currently have strong nerves. Those who entered the gold market in October 2018 at USD 1,200 can still rest easy, but for short to medium-term traders, uncomfortable times could lie ahead. Currently, gold is trading in the USD 1,680 area, just above its lows marked earlier this month. A fall below this would take the price to the critical broad support zone around USD 1,645. If this is sustainably breached to the downside, there is likely to be a significant sell-off in the gold price. Then we would no longer be in a bull market but in a bear market, which would result in a longer-term consolidation and even lower prices. On the other hand, an upward liberation would succeed if the broad resistance zone around USD 1,750 could be recaptured.
Currently, little speaks for the precious yellow metal in the short term. Thus, despite the overheated stock markets, investors are still switching to the equity market in the hope of grabbing a higher yield. Confidence in an end to the Corona pandemic and a strongly recovering economy are undoubtedly good reasons to leave the safety of the gold market. Gold ETF holdings are at pre-crisis levels. Central banks also bought 60% less gold than they did a year earlier. In the long term, however, there are increasing reasons to invest in the metal, which is also a safe haven during crises and serves as a capital and inflation protector. Thus, one should not ignore the signals. Historic highs in national debt, ever new economic stimulus programs worth billions, as well as justified fears of rapidly rising inflation, are solid arguments for investments in tangible assets, primarily in precious metals such as gold and silver. In addition, there are again emerging tensions between the great powers USA and Russia. A trade war between the United States and China has been going on for a long time and is currently threatening to spill over into Europe.
Diversify your portfolio
The old investment rule of broadly diversifying your portfolio still applies. Thus, there should always be a share of gold and silver in the portfolio. In addition to physical gold, gold mines, which have been correcting since last summer and offer an excellent risk-reward ratio over the long term, are a good investment alternative. Goldseek Resources, a young company, is pursuing an exciting strategy. The management, which has an Ernst & Young history in the mining industry, acquires properties in mining-friendly areas, which are also in the vicinity of larger gold producers, and sets up drilling programs.
After successful drill results, these will eventually be passed on to the respective major in the best-case scenario. Goldseek Resources currently has 5 projects under development, 4 of which are located in the gold stronghold of Quebec and one property in historically gold-rich Ontario. The Hemlo camp in Ontario is located only 4 km north of the Hemlo mine operated by Barrick Gold. The other 4 projects in Quebec also enjoy a prominent neighborhood. The Detour Gold Trend is drilled next to Wallbridge Mining, and Urban Barry is drilled next to Osisko Mining and Bonterra Resources. Osisko Mining also has a mine next to the Quevillon project.
Drilling programs are currently underway on all five properties, which are fully funded for 2021. Results are expected from the projects some time soon. In early March, the Company announced that it had entered into an option agreement to acquire the entire Beschefer project from Wallbridge Mining. If the option is exercised, this would be the sixth project in the portfolio. Currently, management owns 61% of the shares, and 28% is also firmly held by institutional investors. Goldseek's market capitalization is presently only EUR 6.5 million. Should a major from the neighborhood express serious buying interest, there is extreme leverage in this Company.
At a decisive mark
The technical situation of the Chinese solar Company JinkoSolar is similar to that of the gold chart. After peaking in mid-January at USD 77, the value fell to currently USD 43, just above its important support zone at USD 40. If this zone were to be breached on a sustained basis, further price losses down to USD 25 would be quite possible. Fundamentally, JinkoSolar could shine with the presentation of a new solar module for decentralized photovoltaic systems. The module "Tiger Pro 54HC" is available in five versions with an output of 395 to 415 watts and an efficiency of 20.28% to 21.30%, the Chinese module manufacturer announced. The new product consists of 108 high-efficiency, monocrystalline half-cells and has a maximum system voltage of 1,500 volts. An entry into the share is not recommended at the moment from a technical point of view. However, we leave the value on the watch list.
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