Rohstoff- und Minenbranche: Der Wochenrückblick von Haywood

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The Weekly Dig

Mick Carew, PhD, mcarew@haywood.com

Haywood Mining Team

Gold Tests $1,300 Level as Timing of Fed Rate Hike Grows More Uncertain

§  As expected, the Federal Reserve held its key interest rate steady as data continued to point to slowing economic activity and reduced levels of consumer spending. Central to the Fed’s decision were the many conflicting signs in the U.S. economy – consistent job growth and an improving housing market against slowdowns in business investment and exports. The statement from the Fed that accompanied the decision was interpreted by many as considerably “dovish”, with low inflation still a concern, leading to many observers expressing doubts that the Federal Reserve would raise interest rates in June, or later in 2016 for that matter. In response to the decision, the US equities and the dollar fell, with the Dow Jones Industrial Average dropping over 300 points late during the week. The Fed’s decision was positive for gold, with both the yellow metal, and gold equities continuing to rally; gold has risen almost 18% YTD, while the S&P/TSX Global Gold Index is up a whopping 43%; both rose over 4% and 12% this week alone to finish at $1296 per ounce and 60.76 respectively. Despite concerns that gold and gold equities may be overbought, the Federal Reserve’s continued dovish outlook on the U.S. economy could see this upward trajectory continue, albeit amid some shorter-term volatility. The rise in silver prices is even more impressive, up 16% in April alone, and finishing at 17.84 per ounce on Friday. Base metals prices continue to defy calls for a correction, with copper (↑0.4%), nickel (↑4%), lead (↑1%) and zinc (↑1.6%) all up, finishing at $2.30, $4.27, $0.82 and $0.88 per pound. WTI crude finished higher, closing at $46 per barrel. Finally, the UxC Weekly Spot Price of uranium finished at $27.63per pound.

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