February 12, 2016
The Weekly Dig
Haywood Mining Team
Gold Price/Equities Run Continues as Investors Seek Safe-Haven Assets
§ Following last week’s rise in the price of gold, the yellow metal surged again this week, breaking through the $1,200 per ounce level as global markets capitulated further and investors moved towards traditional safe-haven assets including gold, the yen and government bonds. Despite easing slightly on Friday, gold hovered around the $1,240 mark for most of the day, after reaching a peak of $1,263 per ounce yesterday, before settling at $1,239 per ounce (↑5.2%). Gold equities followed suit, with the S&P/TSX Global Gold Index rising a further 10% this week, while long-suffering junior gold explorers also benefited. Whilst gold miners reaped the rewards of a rising gold price, the sustainability of the rally is still being brought into question, with a number of observers pointing to similar new-year rallies that have occurred since late 2011. Certainly, growth figures from the Eurozone and retail sales figures in the U.S. appeared to ease concerns over the economy (at least temporarily), with the Dow Jones Industrial Average recovering by 2% after falling 4% between Monday and Thursday. Silver (↑4.7%), platinum (↑4.6%) and palladium (↑4.2%) also surged on the back of the price of gold, with each finishing at $15.79, $955 and $524 per ounce respectively. By comparison, base metals had a mixed week; both copper (↓2.81%), and nickel (↓4.26%) fell to $2.03 and $3.53 per pound respectively, while lead (↑4.6%) and zinc (↑2%) continued to rise as supply concerns following a number of imminent mine closures begin to take hold; both metals finished at $0.84 and $0.78 per pound on Friday. WTI crude prices followed the rout in global markets, falling 12% to Thursday before recovering on Friday to finish at $29.02 per barrel. Finally, the UxC Broker Average Price (BAP) of uranium continued its gradual decline of recent weeks, falling 1% and finishing at $46.00 per pound on Friday.
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