Gold’s price progress slowed by imminent vaccine roll-out and deadlocked US stimulus talks
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Gold traded at $US1,835 per ounce ($2,466/oz) Thursday as US authorities are poised to start rolling out a COVID-19 vaccine across the nation and investors shifted to riskier assets such as equities.
The yellow metal has traded in a tight $US90 range of between $US1,777 to $US1,865 per ounce ($2,410-$2,505/oz) over the past three weeks, as the US Congress vacillates over the size of a stimulus package.
“The higher risk appetite seems to be gaining the upper hand again, and coupled with the vaccine news, it seems to be weighing on gold prices,” Commerzbank analyst, Daniel Briesemann, told Reuters.
The US leads the world in the number of COVID-19 recorded cases to date at 15.5 million, including 293,000 fatalities, and 38 US states reported a daily rise in case numbers, according to reports.
A jointly-developed COVID-19 vaccine from Pfizer and BioNTech is awaiting approval from the US Food and Drug Administration.
Another headwind for gold prices is a rising US dollar which has come off a near three-year low.
“US dollar strengthened overnight because of concerns that a US fiscal stimulus package may not be forthcoming,” said Commonwealth Bank of Australia in a report.
Talks over the details of a near $US1 trillion economic relief package before the US Congress remained deadlocked.
Wells Fargo bank said in an update its price forecast for gold in 2021 was $US2,100 to $US2,200 per ounce.
This is based on a continuing environment of low interest rates and loose monetary policy.
Head of the US bank’s real asset strategy, John LaForge, told Kitco news: “There is still a lot of money printing going on and that is good for gold and silver.”
“For 2021, gold is probably our go-to, it is our favourite,” he said.
Silver has retraced slightly from a seven-year high of $US28.30 per ounce achieved in August, and is trading around $US23.90 per ounce ($32.12/oz), currently.
The white metal’s price could be turbocharged by rising demand for its use in industrial applications like solar panels, said Saxo Markets in a presentation.
Newcrest Mining (ASX:NCM) has announced a massive initial inferred mineral resource of 3.4 million ounces of gold and 160,000 tonnes of copper for its Havieron project in WA’s Paterson gold province.
The inferred resource estimate for Havieron assumes mining by a bulk extractable underground operation for the project which is 45km east of its existing Telfer gold mine.
“This is an important milestone in the journey to fully define the potential of the Havieron project, with drilling results outside of the mineral resource supporting the potential of a larger mineral resource over time,” managing director and chief executive, Sandeep Biswas, said.
Havieron is operated as a joint venture project with Greatland Gold plc and its resource is reported as 52 million tonnes at 2 grams per tonne gold and 0.31 per cent copper for 3.4 million ounces and 160,000 tonnes of copper.
The mineral resource for Havieron is centred on a south-east Crescent zone and an adjacent Breccia zone, and mineralisation remains open, indicating the possibility the resource could continue to grow.
The Crescent zone has 18 million tonnes at 3.8 g/t gold and 0.6 per cent copper for 2.2 million ounces and 110,000 tonnes copper.
The Breccia zone has a resource of 34 million tonnes at 1.1 g/t gold and 0.15 per cent copper for 1.2 million ounces and 50,000 tonnes of copper.
Newcrest has met the stage 3 exploration expenditure requirement of $US45m under the Havieron joint venture and is entitled to an additional 20 per cent interest in the project.
The joint venture interests are now Newcrest 60 per cent and Greatland Gold 40 per cent.
Havieron’s resource estimate is based on 135 drill holes for 126,640m of drilling.
Infill drilling has confirmed the continuity of mineralisation below the northern part of Bombora and include a hit of 9.15m at 7 grams per tonne gold from 558m.
A reconnaissance drill hole in the central part of Bombora intersected a new steep lode 800m below the surface, the deepest intercept to date, said the company.
Additional drill rigs are being brought to the Bombora site in January to test new targets over a 30km strike length.
“These latest results are highly significant because they establish the continuity of high-grade mineralisation over a 2km length directly below the existing 1 million-ounce resource,” chairman Tom Sanders said.
The lodes at Bombora are typical of the Eastern Goldfields in they are “predictable and repetitive and directly comparable to many well-known mines including the Golden Mile deposit,” he added.