Gold is ‘undervalued’ and may see ‘strong move to the upside’, despite Fed rate hike – Luke Alexander

(Kitco News) – Fed rate hike has put downward pressure on gold price, but He went It will eventually break out in force,” said Luke Alexander, CEO and president of Newcore Gold (TSX-V: NCAU), a Vancouver-based gold miner.

The price of gold fell 8.6 percent over the year, although inflation in the US peaked at 9.1 percent in June.

Alexander mentioned that with the Fed raising interest rates, the US dollar will continue to perform well, which will be a “burden on the price of gold”. He added that when “the outlook starts to change, I think that is when we will start to see the performance of gold…it could be a very strong move to the upside.”

“[Gold] It 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.”

Alexander spoke with David Lane, broadcaster and producer at Kitco News.



Newcor Gold

Alexander’s company, Newcore Gold, is mining 216 square kilometers of land in Ghana, which is expected to contain 1.4 million ounces of gold.

Alexander said that working in Ghana has helped Newcore deal with rising costs across the mining sector.

“The cedi, which is the currency in Ghana, has actually fallen against the US dollar,” he said. “A number of our expenditures are denominated in cedi…so we had a natural inflation rate as a result of the weak local currency.”

Alexander said Ghana is the sixth largest gold producer in the world, as well as an ideal region for gold production.

“[In Ghana] He explained that you have a very supportive government, which is important. “Security and very low political risk are the other two main factors, in addition to building things up… [There’s] Very good infrastructure, so that’s one of the things we’re getting rid of. We have a paved road running through the middle of our project, to the entry town. She has a power line running alongside her.”

Alexander remains optimistic about Neukor’s future.

“With the market recovering, and we’re starting to see investors coming back into the sector, I think we’re going to outperform,” he said.

To see if Alexander is considering fundraising through initial coin offerings (ICOs), watch the video above.

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