Sun, Mar 19, 2017 - Page 14 News List

Gold explorers post year’s best week as metal wakes

Bloomberg

A gauge of gold producers, including Newmont Mining Corp and Barrick Gold Corp, posted the biggest weekly gain this year as the metal rebounded on the outlook for US interest rates.

The BI Global Senior Gold Valuation Peer Group of 15 companies is up 6.5 percent this week, the most since the end of December last year.

Gains for the past week were led by Johannesburg-based Gold Fields Ltd, which surged 15 percent, the most since February last year.

Bullion futures have surged after the US Federal Reserve signaled it will stick to its gradual pace on rate increases, easing concerns that policymakers would move at a faster clip amid signs of a strengthening US economy.

Gold, which rallied through the first two months of this year, had foundered this month as the prospect of higher borrowing costs curbed the appeal of non-interest-bearing assets.

“The gold miner’s rally has much more room to go and this will be primarily due to the reason because there is still more upside to gold,” ThinkMarkets UK Ltd chief market analyst Naeem Aslam said in an e-mail. “The Fed is not going to hawkish anytime soon.”

Gold futures for April delivery on Friday rose 0.3 percent to settle at US$1,230.20 an ounce at 1:49pm on the Comex in New York. The metal is up 2.4 percent for the week, the biggest gain since Feb. 3.

Demand for the metal as a haven asset is also getting help from the Fed’s economic forecast, which showed that policymakers do not foresee a rapid pickup in US growth.

US central bankers left unchanged their forecast for this year’s GDP growth at 2.1 percent.

The median estimate showed the US economy expanding 2.1 percent next year and 1.9 percent in 2019, compared with 2 percent and 1.9 percent in the December last year forecast.

“It is almost as if the gold market is relieved that the US Federal Reserve raised interest rates on Wednesday evening, meaning that the whole business can be forgotten again for a while,” analysts at Commerzbank AG said in a note on Friday.

The Bloomberg Americas Mining Index posted its biggest weekly gain since the middle of January paced by mid-sized producers and juniors.

Other metals:

Silver increased 1 percent to US$17.52 an ounce, gaining 3.5 pecent from last week’s US$16.93.

Copper on Friday rose 0.8 percent.

This story has been viewed 3063 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top