Gold Price and Regis Resources Share Price Down: Outlook Still Bullish

At time of writing, the share price of Regis Resources Limited [ASX:RRL] was down 3.21% at midday, trading at $6.34. Current trading price is $6.50.

The Regis Resources share price has shot up recently, coinciding with a rise in the gold price since early June:

regis trading view

Source: tradingview.com

Despite a positive quarterly update released today, Regis Resources had a small dip today as the gold price is experiencing a retracement. Our outlook for gold remains bullish.

Regis Resources share price reacts to gold, not quarterly

There were a number of positive highlights from the Regis Resources quarterly update which include:

  • Record annual production of 363,418 ounces at the top end of annual guidance with all in sustaining cost (ASIC) of $1,029 per ounce at approximate mid-point of the guidance range
  • Group Ore Reserves up 8% to 4.03Moz
  • Quarterly cash and bullion growth of $18.7 million to $205 million
  • Very encouraging’ results from Gloster underground target
  • Medium term production growth outlook to follow a rising trend.’

So it has been a strong quarter for Regis Resources.

But as you can see, the gold price in US dollar terms has come off the its 52-week high that it set on 19 July:

regis trading view 2

Source: tradingview.com

This can be attributed to some uncertainty in the market about what the European Central Bank will do this Thursday.

The expectation is that rates will remain the same, but the outlook for future rate cuts looks good (for gold-bugs that is).

The ECB rate has been at a record low of 0% since March 2016.

If you look at what the ECB has done since it first went to work in 1999, and in particular since the GFC, it seems as if the only thing they know how to do is cut rates.

Speaking more generally about central banks around the world, even if there is a short pause in rate cuts, the longer-term trend is still in gold’s favour, I believe.

Gold isn’t civilised and we don’t care

Warren Buffet’s business partner, Charlie Munger once said:

I think gold is a great thing to sow into your garments if you’re a Jewish family in Vienna in 1939 but, I think civilized people don’t buy gold, they invest in productive businesses.

But with central bankers jostling for growth by cutting rates, it is hard not to stay bullish on gold.

Regardless of whether it is civilised or not, gold has become a way for markets to register a no-confidence vote in the central bank elite.

Be sure to check out our recent coverage of other gold stocks like Regis Resources here.

For an in-depth look at gold’s ongoing potential, Greg Canavan has a great look at the precious metal in this free report. Whether you are a veteran gold bug or a novice aficionado, it is well worth your time.

Regards,

Lachlann Tierney,

For Money Morning


Lachlann Tierney is a writer for Money Morning and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. Recently he has been working with Ryan Dinse. He is involved in three publications:


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