(Kitco News) – Fed rate hikes have put downward pressure on the price of gold, but eventually gold will break out aggressively, said Luke Alexander, CEO and Chairman of Newcore Gold ( TSX-V: NCAU), a Vancouver-based gold miner.
The price of gold fell 8.6% over the year, despite US inflation peaking at 9.1% in June.
Alexander mentioned that as the Fed raises rates, the US dollar will continue to perform well, which would be an “overhang against the price of gold.” He added that when “expectations start to change, I think that’s when we’ll start to see gold perform… It could be a very aggressive move up.”
“[Gold] is undervalued in terms of the momentum that I see in the next six months, in terms of inflation starting to subside, as well as some of the tensions that we continue to see around the world,” he said. declared.
Alexander spoke with David Lin, presenter and producer at Kitco News.
New Gold Core
Alexander’s company, Newcore Gold, operates 216 square kilometers of land in Ghana, which is expected to contain 1.4 million ounces of gold.
Alexander said operating in Ghana has helped Newcore cope with rising costs in the mining sector.
“The cedi, which is the currency of Ghana, has actually depreciated against the US dollar,” he said. “A number of our expenses are denominated in cedi… so we had a natural inflation offset due to the weakening of the local currency.”
Ghana is the sixth largest gold producer in the world, Alexander said, as well as an ideal region for gold production.
“[In Ghana] you have a very supportive government, which is important,” he explained. “Security and a very low political risk are the other two key factors, as well as building things… [There’s] very good infrastructure, so that’s one of the things we’ll get out of debt. We have a paved road that runs through the middle of our project, to the entrance town. There is a power line that passes by.”
Alexander remains optimistic about Newcore’s future.
“As the market recovers and we start to see investors return to the sector, I think we’re going to outperform,” he said.
To find out if Alexander plans to raise funds via initial coin offerings (ICO), watch the video above.
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