ECB Rate Cut Buoys Gold Price After 5.5-year Low

The final month of the year has just begun, and the gold price has little to show for it. It saw a 6.76-percent decline in November, ending the month at $1,064.50 per ounce, and at close of day November 30 was down 10.56 percent year-to-date. 
That said, the gold market did see some positivity Thursday after the European Central Bank cut its deposit facility to -0.3 percent from -0.2 percent, leaving its main refinancing rate steady at 0.05. According to Reuters, the reduction “was smaller than some traders had expected,” and buoyed gold along with the euro.
Specifically, gold was changing hands at $1,064.10 as of 3:04 p.m. EST. While that’s not far off from the metal’s low November close, it’s a breath of fresh air compared to where the yellow metal was sitting earlier in the week. MarketWatch states that on Wednesday, COMEX gold for February delivery settled at $1,053.80, its lowest since February 5, 2010, after US Federal Reserve Chair Janet Yellen “left little room for doubt that she will support [a] rate increase.”
The Fed’s next meeting is scheduled for December 15 to 16, and market watchers have long been expecting the central bank to raise rates for the first time in nearly a decade. Unfortunately, a rate increase is expected to be bearish for the gold price, which tends to fare better during times of looser monetary policy.

Gold company news

Osisko Gold Royalties (TSX:OR) said Monday that it’s entered into a binding letter agreement with Barkerville Gold Mines (TSXV:BGM) under which it will purchase 32 million common shares of Barkerville, plus a 1.5-percent NSR on the company’s Cariboo gold project.
Tuesday, Lydian International (TSX:LYD) entered into definitive agreements for a $325-million construction financing package for its Armenia-based Amulsar gold project. The package will be provided by Orion Mine Finance and Resource Capital Funds. Total financing requirements for Amulsar are pegged at $395 million.
The same day, Gold Resource (NYSEMKT:GORO) acquired an option to buy a gold-bearing property in Nevada that’s currently held by Silver Reserve, a subsidiary of Infrastructure Materials (TSXV:IFM). The company followed that announcement up on Thursday with the news that it’s staked further claims that more than double the Gold Mesa gold-bearing property, also in Nevada.
Pure Gold Mining (TSXV:PGM) said Wednesday that it will sell some of its non-core assets to Premier Gold Mines (TSX:PG) for $5 million plus a 1-percent NSR. The assets are contiguous to Premier’s Hasaga property in Ontario.

New drill results

Monday saw Wesdome Gold Mines (TSX:WDO) release drill results from the 300 zone at its Ontario-based Eagle River mine. According to President and CEO Rolly Uloth, two further lenses have been discovered at the zone, and they “appear to be opening up at depth.” Highlights from one of the new lenses include 8.6 g/t gold over 32.4 meters true width in hole 670-125.
The next day, Pilot Gold (TSX:PLG) put out drill results from the first program at its Goldstrike property in Utah. Key results include 1.01 g/t gold over 39.6 meters. Goldstrike is a past-producing, sedimentary rock-hosted gold project that Pilot acquired in August 2014.
On Wednesday, Dalradian Resources (TSX:DNA,LSE:DALR) announced results from an ongoing regional exploration program in Northern Ireland. As part of the program, it’s mapped and sampled newly discovered quartz veins in the Rylagh area, with results including 168 g/t gold and 42.4 g/t gold. Rylagh is located about 12.5 kilometers southwest of Dalradian’s Curraghinalt gold deposit.
Also on Wednesday, BonTerra Resources (TSXV:BTR) provided further drill results from the West Arena gold project, located within its Quebec-based Gladiator gold project. The company is completing a Phase 1 drill program there, and said recent highlights include 7.2 g/t gold over 7.7 meters in hole B-15-02.