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Gold prices spent the week in range-bound territory amid thin volume and year-end adjustments to investor portfolios.
By Leia Michele Toovey- Exclusive to Gold Investing News
Analysts are expecting gold be quiet ahead of the year-end with light trading volumes and little price adjustments. “Open interest has been languishing as some money has been taken off the table,” said George Gero, vice president with RBC Capital Markets Global Futures. The price of gold reached a peak on Dec. 7, but has declined slowly as many investors opted to cash in their gold holdings, and take the profits to improve their portfolio yields.
Gold was slightly up Thursday, as the lingering debt crisis in Europe stole the show. The euro traded near a three-week low against the dollar amid speculation that some European nations and banks may need to raise more funds. The cost of insuring Greek debt jumped to a four-week high after Fitch Ratings warned on Dec. 21 it may cut the nation’s credit rating to “junk” status.
Spot gold rose $2.56 an ounce to $1,387.11, well below a historical high of around $1,430 hit earlier this month. U.S. gold futures for February were hardly changed at $1,387.9 an ounce.
On Wednesday, Gold futures fell as the U.S. dollar gained strength on economic optimism in the world’s largest economy. Stocks and Treasury yields rose after a report showed the U.S. economy in the third quarter expanded faster than the government estimated and inflation unexpectedly cooled.
Yesterday, the International Monetary Fund quietly announced that it had completed the sale of over 400 metric tonnes of gold to Central Banks and other giant institutions. Though it’s one of the biggest single sales of gold in world history, it had little effect on the price of gold futures.
Company News
Eldorado Gold (CSE:ELD) recommended its shareholders to reject TRC Capital Corp’s unsolicited “mini-tender” offer to buy about 0.91 percent of the Vancouver-based miner’s outstanding common shares at C$17.50 apiece. Eldorado said the offer to buy up to 5 million shares was at a discount of over 4.2 percent to the closing price on the Toronto Stock Exchange on Dec. 13, the day before the offer was commenced. “Eldorado recommends that shareholders not tender their shares in response to this unsolicited, below-market offer,” it said in a statement. Shares of the company, which has projects in Brazil, China, Greece and Turkey, were down over 1 percent at C$18.33 on Wednesday afternoon trading on the Toronto Stock Exchange.
Solitario Exploration & Royalty Corp. (AMEX: XPL; CSE: SLR) and Ely Gold & Minerals Inc. (TSXV: ELY) have signed a Limited Liability Company Operating Agreement of Mt. Hamilton LLC. Mt. Hamilton LLC, a limited liability company now holds the Mt. Hamilton project assets. As previously announced, Solitario contributed its initial investment to the Company by making a US$300,000 advance royalty payment to the owners of the property subject to the Mt. Hamilton lease. Per the terms of the Agreement, DHI Minerals Ltd., Ely’s wholly owned US subsidiary, has contributed all of its interests in the Mt. Hamilton project to the Company for a 90 percent initial interest in the Company and Solitario has a 10 percent initial interest in the Company by virtue of its initial US$300,000 contribution. The Mt. Hamilton project is an advanced gold project where over 314 drill holes have defined the Centennial gold deposit. Solitario may earn up to an 80 percent interest in the Company by completing various staged commitments.