Why the Golden Rim Resources share price is up 14% today (ASX: GMR)

Shares for Golden Rim Resources Ltd [ASX:GMR] gained over 14% today after they discovered a second high-grade zone at Diabatou in Burkina Faso.

At time of writing, the GMR share price was trading at $0.16.

What happened to the GMR share price?

Golden Rim Resources is a public exploration company with projects in Burkina Faso and Chile.

Share prices jumped after the company announced they found a second zone of high-grade gold with grades up to 65.7g/t. This second zone is located 25 metres northwest and parallel to the first high grade gold discovered earlier.

Here is what Golden Rim’s Managing Director, Craig Mackay had to say:

We have now discovered two spectacular high-grade gold zones hosted in granite, and at shallow depth, in our first drilling program at Diabatou within the recently acquired Margou Permit.  

To date we have only explored a small portion of the entire granite area within which Diabatou is located so these results are very exciting. More broadly, the new permits remain almost totally unexplored and we believe they have extraordinary potential to provide additional grassroots gold discoveries.

The gold price has been on a tear this year.

As you can see below, gold is trading at a high of $2,284 per ounce, at time of writing:

AUD Gold Price Chart

Source: goldprice.org

Drilling for gold has also been increasing. As you can see below, gold accounted for much of the year on year increase in drilling activity.

Global Drilling Activity - Gold

Source: S&P Global Market Intelligence

What’s pushing the gold price up?

We’ve had 10 years of low interest rates and unconventional policies. We could be heading to the next recession, yet central banks haven’t been able to normalise the economy.

Interest rates are falling.

There are also worries that the US–China trade war will cause an economic slowdown. As fear starts to grip the markets, gold has been rising.

Yet gold prices have also been increasing because central banks have gone on a shopping spree to add to their gold reserves. Central banks bought more gold in 2018 than any time since 1970, when we were on the gold standard.

With the global economy slowing, it may be a good idea to look at owning some gold.

There are a few ways to play this. The best, of course, is to own physical gold.

Another way is to buy gold stocks. You can check out the ‘How to pick winning gold stocks’ report here.

Best,

Selva Freigedo
For The Rum Rebellion


Selva Freigedo is a research analyst for The Rum Rebellion. Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table. Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default. Selva has also lived in Brazil, Spain and the USA. Back in 2000 she was living in the US as the dot com bubble popped… And in 2008 she was in Spain as the property market exploded and then collapsed… She has seen first-hand what happens when bubbles burst. Selva joined Port Phillip Publishing’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.


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