The Greatland Gold share price (LON:GGP) has pulled back from their recent highs and as it finds support, analysts are suggesting now is a good time to buy.
Greatland Gold has outperformed during the period of volatility in stock markets in 2020 due to an exciting series of updates from its gold projects in Australia.
The company is operating six exploration licenses in Western Australia and Tasmania in areas that have not previously been subject to heavy prospecting.
The Gold safe haven?
Gold has been long though of as a safe-haven and the perfect place to allocate capital during periods of uncertainty and Greatland Gold could be seen as a proxy for the underlying price of gold.
However, the safe haven gold thesis has tested and somewhat disproved during the recent the selloff.
As coronavirus started to negatively affect global stock markets, true to form there was a move higher in gold as investors flocked to safe havens such as gold and bonds.
Though gold initially rose, as market volatility picked up in stock markets it feed through to the gold market with market participants being forced to liquidate positions in the gold futures and options markets to cover requirements elsewhere.
Gold prices sank $250 and have not yet again tested to the upside.
With such moves causing volatility in gold, it suggests Greatland Gold should not be seen as a safe haven proxy investment on the price of gold.
This is not where the opportunity lies for Greatland Gold, or where investors will find share price appreciation.
In the same vein, it is unlikely volatility in the price of gold will negatively impact Greatland Gold in the short term.
Greatland Gold shares
Greatland Gold shares have risen not because of a move higher in the price of gold, but because of progress in it’s exploration program in Australia, which has yielded very encouraging drill results.
The most recent of these announcements was an update on the Havieron deposit in the Paterson region of Western Australia.
The company said the Havieron project had demonstrated high-grade mineralisation with a 0.5m section yielding 159 grams of gold per tonne and a 3m section yielding 91 grams/tonne.
There are currently eight rigs operational in the area and testing continues, providing the opportunity for further positive updates in the near future.
Gervaise Heddle, CEO of Greatland Gold plc, commented on the results:
“We are delighted by this sixth consecutive set of excellent results from Newcrest’s drilling campaign, which continue to demonstrate the continuity of high-grade mineralisation and expand the mineralised footprint.”
“These latest results represent one of the best sets of drilling results at Havieron since Newcrest began its exploration campaign and reinforce the potential to accelerate the timetable for commercial production.”
Since the update Greatland Gold has pulled back from the recent high of 5.68p but equity analysts remain positive in the shares.
“I would suggest investors use the recent pullback to pick up the shares,” said John Woolfitt, Director of Trading at Atlantic Capital Markets.