Precious Metals Weekly Round-Up: Gold Breaks US$1,350

- June 14th, 2019

Gold made gains this week as geopolitical issues continued to concern investors, making precious metals attractive as a safe haven.

Gold climbed over the US$1,350 per ounce mark on Friday (June 14), setting itself up for its fourth weekly gain on the back of growing political concerns about the Middle East. The metal was also pushed higher by weak economic data from both China and the US. 

The yellow metal has gained over 1 percent for the week and hit its highest level since April of last year.

“In people’s minds there is a sense of a deeply darkening macroeconomic backdrop, in particular the likelihood that the US will drop interest rate quite soon,” said Ross Norman of Sharps Pixley.

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Norman noted that investors are adding more gold to their portfolios in expectation that the US Federal Reserve will lower interest rates next week. Lower rates typically add pressure to the greenback, which generally lifts the price of the precious metal.

Aside from that, market watchers have tuned into recent data showing that China’s industrial output growth slowed to a more than 17 year low of 5 percent last month. The news adds to mounting signs of weakening demand in the world’s second largest economy. Much of this has been attributed to the US ramping up trade pressure against the Asian nation.

The ongoing US-China dispute has had negative effects on the North American country as well, with an unexpected rise in the number of Americans filing applications for unemployment in the last week.

As of 9:53 a.m. EDT on Friday, gold was up 1.18 percent for the week, trading at US$1,350.60.

Meanwhile, silver followed gold’s lead on Friday, gaining on the back of ongoing geopolitical concerns. The white metal was up just shy of 1 percent for the week and traded just under US$15 per ounce on Friday morning. As of 9:55 a.m. EDT, the white metal was trading at US$14.97.

As for the other precious metals, platinum dipped slightly on Friday, but was up close to 1 percent for the week. As of 10:00 a.m. EDT, the metal was trading at US$807 per ounce.

Palladium also climbed, edging up 1.55 percent for the week. As of 10:03 a.m. EDT, palladium was trading at US$1,437 — a gain of over US$90 from the previous week.

Precious metals top news stories

Our top precious metals stories this week include Barrick Gold (TSX:ABX,NYSE:GOLD) continuing its expansion plans by acquiring additional shares of Midas Gold (TSX:MAX,OTCQX:MDRPF), silver and gold reacting negatively to US President Donald Trump ending Mexico tariff talks and White Gold (TSXV:WGO) increasing the mineral resource estimate at its White Gold asset in Canada’s Yukon by 25 percent.

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1. Barrick Continues to Expand with Bigger Stake in Midas Gold

Barrick Gold is continuing its expansion plans by acquiring an additional 7,274,142 common shares of US junior miner Midas Gold, the company announced on Tuesday (June 11).

At 46,551,731 common shares, Barrick currently owns 19.6 percent of Midas. This new purchase will make it so the gold miner owns approximately 19.9 percent of the junior company.

As per the agreement, Barrick will purchase the additional Midas common shares at an offering price of C$0.60 each, for a total cost of C$4.4 million.

2. Gold and Silver Dip as Trump Ends Mexico Tariff Talk

Both gold and silver were sent on a downward trajectory when Trump announced on Monday (June 10) that he will not be imposing trade tariffs on Mexico. The news lifted the US dollar and moved investors away from precious metals.

The yellow metal dropped by just over 1 percent, while silver lost all of the gains that it made last week, dipping more than 2 percent on Monday.

“Global equities are rallying across the board and we are seeing liquidation on safe haven demand,” Phillip Streible, senior commodities strategist at RJO Futures, told Reuters.

3. White Gold Increases Mineral Resource Estimate by 25 Percent

White Gold has increased the mineral resource estimate at its White Gold asset in Canada’s Yukon by 25 percent, thanks to 2018 activities.

On Monday, the miner noted that the project’s indicated mineral resource has grown 8 percent to 1,039,600 gold ounces within 14,330,000 tonnes at 2.26 grams per tonne (g/t) gold. The inferred mineral resource has climbed 80 percent to 508,700 gold ounces within 10,696,000 tonnes at 1.48 g/t gold.

The increases cover the Golden Saddle and Arc deposits at the property and come after just 12,368 meters of drilling in those areas last year.

Also in the news

Also this week, Reuters reported on Thursday (June 13) that British hedge fund Odey Asset Management will reject any offer that Barrick Gold makes for its stake in Acacia Mining (LSE:ACA) that is framed as “best and final.” Odey is the second investor to publicly oppose Barrick’s buyout proposal.

“Odey is not rejecting any specific level of firm offer. Rather, Odey is preemptively committing to reject a specific style of opening firm offer,” the company stated.

The fund added that Barrick’s offer would impair the ability of Acacia’s board to give a “robust response” that could effect any change. According to Renfinitiv, Odey currently owns 1.94 percent of Acacia.

Agnico Eagle Mines (TSX:AEM,NYSE:AEM) announced that it has begun planning the consolidation of its holding in the Val d’Or mining camp in Quebec with a C$26 million offer for Alexandria Minerals (TSXV:AZX). The news sent shares of the exploration company surging over 40 percent.

The purchase will allow Agnico to consolidate an additional 14,819 hectares of mining claims that cover about 35 kilometers of strike length along the Cadillac-Larder Lake. Three of Alexandria’s properties contain a historical inferred mineral resource total of 526,702 ounces of gold and indicated mineral resources of 448,654 ounces.

Alexandria recently entered into a deal to be acquired by Chantrell Ventures (TSXV:CV.H). To move forward with Agnico, the company will have to terminate the Chantrell agreement and pay the termination fee of C$875,000.

Agnico currently owns 28.8 million Alexandria shares, which is a 5.6 percent stake in the company.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: White Gold is a client of the Investing News Network. This article is not paid-for content.

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