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Gold has been having a tough time as of late, with gold futures closing Wednesday at $1,187 per ounce, a three-week low. The downward price pressure has been attributed to a US existing homes sales report.
According to data put out by the National Association of Realtors, existing home sales increased by 6.1 percent in March to the highest annual rate in 18 months. While that news is encouraging for the real estate market, it’s added to the worries of gold investors, considering it shows the economy may be reaching a point that would make the US Federal Reserve comfortable with raising interest rates for the first time in nine years.
The decision to raise short-term interest rates was curtailed briefly last week when it was reported that there was a slowdown in US hiring in March. Fed officials want to see continued improvement to the job market and be confident the inflation rate will rise towards 2 percent before they raise the rate.
Conversely, the gold price is being supported by the fear that Greece won’t be able to make a loan payment due next month; if it doesn’t make that payment, the country may eventually exit the Eurozone. According to The Wall Street Journal, some investors opt to buy gold in times of political or economic uncertainty with the belief that it will keep its value better than other assets.
Company news
Despite Wednesday’s gold price dip, some gold companies saw good things this week. For instance, Canada Strategic Metals (TSXV:CJC) reported a new high-grade gold discovery at its Sakami project. The discovery, which saw intersections of up to 6.86 g/t gold over 9.6 meters, including 9.49 g/t gold over 6.5 meters, is a very significant one for the company and the news reflected positively on its share price.
Perseus Mining (TSX:PRU,ASX:PRU) was given the green light to move forward with the development of its Sissingue gold mine in Cote d’Ivoire after submitting a revised feasibility study. The revised measured and indicated mineral resource is now at 880,000 ounces of gold. At end of day Wednesday, the company’s share price was up 14.81 percent, at C$0.31.
Balmoral Resources (TSX:BAR) saw good results from the first nine holes of its 2015 winter drill program at Bug Lake, reporting intercepts of 19.55 g/t gold over 44.45 meters, including 34.84 g/t gold over 24.14 meters, as well as 4.28 g/t gold over 53.78 meters, including 7.01 g/t gold over 22.48 meters.
Richmont Mines (TSX:RIC,NYSEMKT:RIC) put out its results from the first quarter of 2015, noting that its gold production was 25,859 ounces, an increase of 23 percent on year. Meanwhile, the company’s gold sales increased by 21 percent, hitting 24,791 ounces.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.
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