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Trump leaks keep gold price steady while miner Asanko’s shares crash

The gold price held steady today as the dollar weakened, the yellow metal pushing against the downward pressure from the prospect of another interest rate hike by the Federal Reserve.

Spot gold was down 0.03% at $1,268.46/oz at 04:07 GMT. On Wednesday, it reached a high of $1,273.74/oz, its strongest since April 25. US gold futures fell 0.3% to $1,268/oz.

The dollar’s weakness coincides with growing political tension in the White House following the resignation of communications director, Mike Dubke, yesterday and allegations of Trump giving out his unsecured mobile number to world leaders. This breach of presidential etiquette, follows on from numerous intelligence leaks; faith in adherence to security protocols is decreasing in the eyes of the market. There are also growing concerns over how the other global leaders, notably Germany’s Angela Merkel, now view the American executive.

On the other hand, sterling was showing strength as the incumbent UK Conservative party still lead in the polls overall, despite some pointing to a hung parliament. Opposition leader Jeremy Corbyn’s left wing manifesto is seen as anti-business by the economic community.

Despite these geopolitical factors, the prospect of further interest rate hikes by the Federal Reserve is still playing its part in the gold price. Reuters quoted Societe Generale analysts saying “Fed tightening this year and in 2018 — whether in the form of higher interest rates or balance sheet deleveraging — will inevitably dent investors’ appetite for gold.” According to Thomson Reuters data, traders see an 86.6% chance of a 0.25% rate hike on June 14.

Meanwhile there is bad news for miners Asanko Gold Inc. Founder of activist short seller Muddy Waters LLC Carson Block says nothing shy of a massive rally in gold will save the mining operation, which, having made investments in Ghana based on flawed geological data, looks likely to exhaust liquidity in 2018.

“At this point Asanko has backed itself into a corner and short of gold ripping to $1,700 an ounce, we don’t see how this company gets out of it,” Block said on Wednesday in a telephone interview with Bloomberg from San Francisco. The article went on to report that Asanko shares fell 13% to C$2.19 before trading was halted in Toronto on Wednesday.

Photo: President Donald Trump speaks briefly with Secretary of Defence Jim Mattis on May 29, 2017. Credit: Chairman of the Joint Chiefs of Staff (edited) under CC BY 2.0

Link to this article: : http://www.goldmadesimplenews.com/gold/trump-leaks-keep-gold-price-steady-while-miner-asankos-shares-crash-13181/

Posted by on Jun 1 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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