Gold price recovers from five-month low on new US stimulus hopes
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The price of gold has moved back above $US1,800 per ounce after dropping to a five-month low on Friday as the US Congress musters up a near $US1 trillion economic stimulus package.
Adding momentum to gold prices is a weaker US dollar, which sank to a near three-year low.
“Gold seems to be deriving strength from a tired dollar and mixed comments from US Federal Reserve chairman Jerome Powell and Treasury Secretary Steven Mnuchin,” FXTM senior research analyst, Lukman Otunuga, told Reuters.
Gold was trading at a steady $US1,815/oz ($2,463/oz) in Wednesday trade, while silver touched $US23.90/oz ($32.35/oz), according to Kitco.
Gold has faced sustained selling pressure on reports of breakthroughs in vaccine treatments for COVID-19 which have provided optimism for a global economic recovery.
US Federal Reserve chairman Jerome Powell has urged the US government to inject more spending into the domestic economy, telling a Senate committee the economy’s outlook is uncertain.
“The risk of overdoing it is less than the risk of underdoing it,” he told the Senate’s Banking Committee on Tuesday, according to Commonwealth Bank of Australia in a report.
However, Treasury Secretary Mnuchin told the same committee hearing it was time for some existing stimulus spending to end.
Specifically, he said some CARES Act emergency lending programs would close by year end.
Meanwhile, physical gold holdings in London vaults have reached record levels at 9,350 tonnes and valued at $US565bn, according to the London Bullion Market Association.
In contrast, gold exchange-traded funds (ETFs) witnessed the largest outflows for four years in November at 100 tonnes on disappointing price action.
“ETF investors have become a negative factor for the gold price after their purchases had previously driven up the price between April and August,” Commerzbank precious metals analyst, Carsten Fritsch, told Kitco news.
The company has a list of priority gold exploration targets along a combined strike length of 51km in its Whim Creek tenure.
Anax Metals can earn an interest of up to 80 per cent in the project from project partner Venturex Resources (ASX:VXR).
The company is also exploring Whim Creek’s massive sulphide copper-zinc resources.
Drilling results at Boyd’s Dam included 3m at 10 grams per tonne gold and 2m at 9 g/t gold.
“Drilling east and west of Boyd’s Dam and at depth by diamond drilling continues to provide encouragement that a complex system of fold anticlines and fault structures are present that can add to the gold mineralisation in the broader Boyd’s Dam – Boyd North area,” technical director, Bruce Kay, said.
The company has a 50 per cent interest in the Four Eagles project, and the other 50 per cent is held by Hancock Prospecting subsidiary Gold Exploration Victoria.
The acquisition consolidates the company’s landholding in the area after it took on the Music Well project, and its exploration tenements now cover 540sqkm.
The recent discovery of new intrusion-related gold systems (IRGS) gold deposits in the Yilgarn Craton of WA has led to increased exploration activity, said the company.
“Although in a premier gold producing region, our Eastern Goldfields tenements have been subjected to very little previous exploration, so we are currently finalising field work plans for Q1 next year which will systematically target mineralisation associated with IRGS gold deposits similar to those found at Hemi and Ramone,” managing director, Blake Cannavo, said.