Greatland Gold share price could struggle as market sell-off continues

The Australia-focused gold explorer’s stock has lost its upward momentum of late, with it down 27% since mid-September, after it succumbed to weakening market sentiment as investors pullback amid Covid-19 concerns.

  • Greatland Gold shares lose momentum amid broader market sell-off
  • Gold price struggles to break higher despite economic and political uncertainty
  • UK equities come under renewed pressure amid tighter Covid-19 restrictions

Greatland Gold stock has lost its upward momentum of late, with it down 27% since mid-September, after it succumbed to weakening market sentiment as investors pullback amid Covid-19 concerns.

However, the Australia-focused gold explorer is still up more than 900% year-to-date, with the company catching investors attention after its latest drilling report from its Havieron deposit in Western Australia indicated the site could deliver bulk tonnage of the precious metal.

‘The expansion of the new Northern Breccia zone is an important development that highlights the potential for a bulk tonnage mining operation at Havieron,’ Greatland Gold CEO Gervaise Heddle said.

‘Significantly, excellent results from step out drilling to date indicate the presence of higher-grade, massive sulphide mineralisation within the breccia bodies, which are yet to be fully defined by drilling and remain open at depth.’

Greatland Gold closed at 19p per share on Monday, with the stock up 965% year-to-date.

Gold price: technical analysis

Having declined in step with equities of late, it was odd to see gold not rally in tandem with them on Friday, Josh Mahony, senior market analyst at IG said.

‘The price continues to hold above the 100-day SMA ($1847), providing a possible floor for a rebound towards $1944 and the 50-day SMA,’ he said. ‘Alternately a close below $1847 brings a move towards $1765 into view.’

Greatland Gold on track to deliver strong 2020 performance

The gold miner is on track to deliver an initial resource for Havieron in Q4 2020, with exploration programmes at the site ongoing to define the extent of the mineralised system.

As it stands, environmental and baseline studies are progressing to support potential commencement of decline at Havieron by end of calendar year 2020 or early 2021, subject to market and operating conditions and receipt of all necessary permits, consents and approvals.

Greatland Gold is continuing to investigate potential to achieve commercial production within two to three years from commencement of decline.

‘Alongside the progress at Havieron, we are continuing with our exploration plans at our other assets in the Paterson region and look forward to providing the market with further updates,’ Heddle added.

FTSE 100 bounces from support

The FTSE 100 has rallied off the 5800 support zone on Monday which held all the way through last week, according to Chris Beauchamp, chief market analyst at IG.

‘This matches the price action seen earlier in the month when the 5800 area was similarly defended,’ Beauchamp said.

‘Last Wednesday’s high at 5975 will be a key test – if the price can clear this then a move back towards 6105 and the September high comes into view,’ he added.

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