The Weekly Dig - October 14, 2016
Mick Carew, PhD
and The Haywood Mining Team
U.S. Payrolls Sees Gold Volatile After Tuesday’s Heavy Selling
Highlights:
- After last week’s “Terrible Tuesday” that saw the price of gold plunge below $1,300 per ounce for the first time since late June, this week was relatively more subdued as gold tested the $1,250 per ounce threshold for much of the week. As a result, gold mining equities largely trended sideways over the course of the week, with the S&P/TSX Gold Mining Index up 2 points as of close on Friday. Whether the $1,250 per ounce level represents a floor in the price of gold remains to be seen, with commentators offering a variety of views as to where the commodity will be by year’s end. Some pundits view last week as a correction, representing an increased likelihood of an interest rate hike in December. Geopolitical tension between the U.S. and Russia and China has added to general market uncertainty, although China’s inflation data has quelled some concerns to the country’s economy. Gold finished at $1,252 per ounce on Friday. In contrast however, other investors take a more bearish tone and anticipate that gold price will fall further as the Federal Reserve raises rates to facilitate its self-appointed target metrics. Meanwhile, the price of silver was marginally lower this week (↓1%), while platinum (↓3%) and palladium (↓4%) prices plunged for a second week, finishing at $933 and $647 per ounce. In base metals, copper fell 3%, while both lead and zinc fell 4%; nickel finish 3% higher at $4.74 per pound. The price of WTI crude remained above the $50 per barrel level, rising marginally to finish at $50 per barrel. Finally, the UxC Weekly Spot Price of uranium continued to fall, falling below the $22 per pound level on Thursday.
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