Gold price looks to US election and economic stimulus for direction
Link copied to
The gold price has been gyrating around the $US1,900 per ounce level this week as investors weigh up the market’s direction on a stronger US dollar and the prospect of more government stimulus spending.
In morning trade Friday, gold was trading at $US1,906 an ounce ($2,693/oz) down from $US1,929/oz a week ago, and silver was steady at $US24.37/oz ($34.38/oz), said Kitco news.
Political issues are front of mind for investors with the run-off between President Donald Trump and former vice-president Joe Biden too close to call for many commentators.
“Absent a shock to risk sentiment, it appears gold is stuck in a holding pattern before the November 3 US election,” Macquarie Wealth Management said in a report according to Bloomberg news.
The International Monetary Fund’s (IMF) latest World Economic Outlook said $US12 trillion in fiscal support and monetary easing had been forthcoming since the COVID-19 crisis, and forecast more government spending and central bank action was needed.
“The problems cited by the IMF’s WEO still require monetary easing and fiscal spending to continue, which is ultimately positive for gold,” said HSBC analysts, reported FX Street news.
The US dollar index, a measure of the currency’s strength, rose slightly to 93.78 overnight.
Inflows into exchange traded funds for gold reached record levels in the year to September at 1,000 tonnes, bringing total ETF gold holdings to a new high of 3,880 tonnes and equivalent to $US235bn, according to the World Gold Council.
Several ASX gold companies saw their share prices rise after reporting fresh developments.
The licence area includes a 40km strike length of the adjacent Stawell gold corridor that hosts the historical Moyson gold mine that produced 75,000oz at 22 grams per tonne gold.
Stawell gold mine is 7km east of the exploration tenement, and the Navarre Minerals Resolution Lode is 6km to the east.
“This acquisition delivers the company gold prospects including high-grade intercepts in historical drilling, untested workings and surface soil and rock sampling not far from the highly profitable Stawell mining operation,” chairman David Flanagan said.
“With mining activities now underway at a time of continuing high gold prices, we are looking forward to the significant cash generation from this mining campaign to support the self-funded ongoing appraisal and exploitation of the Agate Creek project and the company’s broader project portfolio,” chairman Stephen Bizzell said.
Around 43,000 tonnes of gold-bearing ore will be toll processed at the Lorena gold mine plant starting in mid-November, and the company will use the cashflow to carry out further exploration at Agate Creek.
Studies are underway for a larger open pit mine for Agate Creek which has a defined mineral resource for gold of 471,000 ounces.
East Kimberley gold tenement now 100 per cent owned by Peako Limited
Peako Limited (ASX:PKO) will acquire the remaining 40 per cent stake in the Eastman tenement for $90,000 and 2.6 million of its shares to own 100 per cent of the project.
Under a farm-in agreement with Sandrib Proprietary, Peako earned a 60 per cent stake in the Eastman tenement in WA’s East Kimberley region.
Ongoing work by Peako has identified latent gold potential across the Eastman tenement that was overlooked by past explorers whose focus was on base metals, the company said.
Drilling results obtained last year show Eastman has prospectivity for gold, and included hits of 6m at 27.27 g/t gold, and high resolution imagery has identified priority targets for exploration.