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Gold up as dollar wavers and Australia overtakes Canada for exploration

Kalgoorlie Pit

The gold price moved up slightly today as the dollar wavered following the release of the minutes from the Federal Reserve’s (the Fed’s) July meeting. This morning gold was at $1,288.48 with December delivery up at 0.8% to $1,293.70 per ounce.

As US inflation now looks less certain, so does an interest rate hike from the Fed before December. As a result the dollar has weakened, pushing gold up. Dominic Schnider at UBS Wealth Management in Hong Kong told Reuters “It’s a dollar story and a concern that the market’s been having with regards to geopolitical events”.

Although the North Korea crisis now seems to have cooled, and its impact on markets decreased, the spectre of political uncertainty remains, not least in the White House where US president Donald Trump has had to deal with numerous CEO resignations form his Manufacturing Council and the Strategic and Policy Forum, over his handling of the violence waged by extremists in Charlottesville. Trump had implied equivalence between anti-racist protestors and neo-nazis.

Other precious metals have also benefitted from the weakened dollar, notably palladium which climbed to $920.48, a 16 year high.

In mining, prospectors in Australia have bucked a trend for declining gold exploration budgets. The 12 months up to March saw a 30% increase in such spending, up to A$653.5 million. This saw Australia overtake Canada for the first time since 2003 as the world’s biggest spender on exploration.

“ASX-listed gold companies were able to resume exploration in Australia earlier than their global colleagues due to the weakness of the Australian dollar,” Citi analyst Trent Allen told the Financial Times. “[This] lifted margins and lowered the US dollar costs from 2013.”

One miner was emphatic in his advocacy of Australian gold prospects. Jake Klein, chair of Evolution mining told the same paper: “Australia is a god’s gift to miners. It’s a vast underpopulated mining-friendly, resource-rich region where the rule of law can be relied on — and you can’t say that about too many other countries in the world.”

Photo: The Kalgoorlie super pit in Western Australia

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-up-as-dollar-wavers-and-australia-overtakes-canada-for-exploration-13352/

Posted by on Aug 17 2017. Filed under Gold News. 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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