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Gold price continues short term caution, peak of $1,350 could trigger new mining projects

Photo credit Christ Butterworth. Edited with TVScanline effect.

As alluded to yesterday, Janet Yellen’s semi-annual monetary policy report to Congress on Tuesday was cause for much anxiety in the gold markets, owing to anticipation over whether Yellen would confirm or deny the possibility of an interest rate hike in March.

Since then, news from the testimony pointed towards the feared rate hike. CityAM commented on Yellen’s report, saying that delaying raising interest rates would be ‘unwise’ if the US economy continues to show healthy indicators.

One of the key takeaways from the meeting was the stress Yellen placed on increasing rates regularly at a ‘moderate pace’, rather than delaying rate rises and then implementing a more disruptive hike at a later date.

Yellen said it was ‘too early’ to know for sure what policies the Trump administration would follow through on. Livemint commented that new US economic data such as the Consumer Price Index and retail sales would be important for investors’ strategies. All this means the gold price will continue to hover or dip rather than climb.

In mining news Nasdaq reported that Victor Gobitz, the new chief executive of Buenaventura, one of Peru’s biggest precious metals miners, ruled out an expansion of new mining projects until gold tips $1350/oz. He told Reuters that there was a steady increase in profits attributable to the gold price having a low-key bullish run.

He also alluded to a business plan with its partner Newmont Mining Corp that could revitalise the $4.8bn copper and gold project in Conga, which was put on hold in 2011.

Interestingly, the SPDR Gold Trust, the world’s largest physically-backed gold fund, said today that it is now in compliance with the Accounting and Auditing Organisation for Islamic Financial Institutions, meaning it has been given the green light from Sharia law.

Reuters reported that gold has traditionally been classified as currency in Islamic finance, which means it is only allowed to be used in spot transactions. Joseph Cavatoni, Principal Executive Officer at World Gold Trust Services, was quoted as saying ‘[this] announcement marks an important step in addressing the demand for gold in the $2 trillion Islamic finance market’.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-continues-short-term-caution-peak-of-1350-could-trigger-new-mining-projects-12975/

Posted by on Feb 15 2017. Filed under Gold News, Mining. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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