By: Dylan Sikes - AllPennyStocks.com News

Monday, April 20, 2015

The U.S. economic data has been mixed recently, which has made an interest rate hike in June unlikely. This has helped gold prices a little in April, although prices are still close to $1200 an ounce. Gold prices fell in the previous two months but have shown some strength in April. In a research note, Wells Fargo though said that the fundamental picture for gold is still gloomy. Wells Fargo further noted that the recent gains could end up being “transitory.” Paul Christopher, who serves as the head of international strategy at Wells Fargo Investment Institute, noted that the recent gains have been driven by some disappointing U.S. economic data. The Greek debt crisis has further provided support to the precious metal. However, Wells Fargo’s Christopher still expects prices to end lower in 2015 and this is because of a stronger dollar.

Another negative for gold, which was also noted by Christopher in his research note, is low inflation. Indeed, the global economy is facing a threat of deflation. In this backdrop, the outlook for gold prices remains gloomy.

For gold miners, the focus remains on bringing down costs. Wells Fargo expects gold prices to end between $1050 an ounce and $1150 an ounce in 2015. Many miners would settle for this level though as they have managed to bring down their costs in the past year.

Miners’ focus has been on high-grade zones in the past year as this helps in bringing down costs. This morning, Canada Strategic Metals Inc. (TSX-Venture:CJC), an emerging company focused on the exploration and development of projects covering more than 20,000 hectares in Quebec, announced the discovery of a high-grade gold zone on the Sakami gold project.

The latest discovery from the program, which was completed in 2015, confirms the potential for the discovery of enrichment zones within the wide, gold-bearing Zone 25. The program consisted of seven holes for a total of 2049 meters of drilling. The aim of the program was to increase the size of Zone 25, which is the main gold zone in the La Pointe sector of the Sakami property.

Jean-Sebastien Lavalle, CEO of Canada Strategic Metals, said that the high-grade gold discovery is very significant for future exploration at Sakami. He added that the intersection of 6.86 g/t Gold over 9.60 meters confirms the potential for high-grade mineralization and also confirms the extension of Hole PT 14-79 drilled last year.

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