Precious Metals Weekly Round-Up: Gold Can’t Catch US$1,300

- April 19th, 2019

Precious metals were relatively flat for the week as the US dollar fluctuated, sending the metals in various directions before steadying.

Gold edged up slightly on Thursday (April 18) after data showing that eurozone businesses were under pressure brought concerns surrounding global growth back into the spotlight.

The yellow metal made its way out of the near four month low it touched in the previous session, but remains on track for a fourth straight weekly decline.

“The figures for the eurozone were mixed. The market clearly does not know what to do next. But the European Central Bank is going to be on hold, which is offering some support for gold,” said Peter Fertig, analyst at Quantitative Commodity Research.

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“The stock markets are down and that’s compensating a bit in gold,” Fertig added. “Uncertainty about the economic situation is also supporting the gold market a little bit.”

Investors are moving towards the precious metals as safe havens. The eurozone numbers come at a time when global markets are gradually recovering from fears of a slowdown after a large amount of positive data came in from China and the United States.

Looking ahead, market watchers will turn their attention towards possible developments in the US-China trade talks. As of 10:16 a.m. EDT on Thursday, gold was trading at US$1,275.50 per ounce.

Meanwhile, silver was relatively steady on Thursday, hovering just below the US$15 per ounce level and still keeping an arm’s length from the psychological level of US$16 that many industry experts thought it would see by now.

As of 10:19 a.m. EDT, the white metal was trading at US$14.97.

As for the other precious metals, platinum managed to climb just under 1 percent for the week and made gains of 0.34 percent on Thursday. The metal was at US$890 per ounce as of 10:20 a.m. EDT.

For its part, palladium fell marginally on Thursday after jumping 3.9 percent to a two week high of US$1,406.81 per ounce in the previous session.

The metal continues to be supported by high demand and a growing tightening in supply. As of 10:21 a.m. EDT, the metal was trading at US$1,390.

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Precious metals top news stories

Our top precious metals stories this week include a report on Acacia Mining’s (LSE:ACA,OTC Pink:ABGLF) gold production during the first quarter of 2019 and First Majestic Silver (TSX:FR,NYSE:AG) achieving output of 6.3 million silver equivalent ounces during Q1 2019.

A final highlight is S&P Global Market Intelligence’s call for record high gold output in 2019.

1. Acacia’s Gold Production Down 13 Percent in Q1

Acacia Mining’s gold production slipped 13 percent during the first quarter of 2019, mainly due to lower output from its North Mara and Buzwagi mines, the company announced on Monday (April 15).

Although the Tanzania-focused miner only managed to produce 104,889 ounces of the yellow metal during Q1, the 104,985 ounces that were sold during that time were in line with production.

“While historically our production is typically stronger in the second half of the year, production this quarter was impacted by unanticipated production issues at our North Mara mine,” said Peter Geleta, interim CEO, in a press release.

2. First Majestic’s Q1 Silver Equivalent Output Reaches 6.3 Million Ounces

First Majestic Silver achieved 6.3 million silver equivalent ounces during the first quarter of 2019, up from 3.9 million ounces in the same period a year ago, the miner announced on Tuesday (April 16).

The company produced 3.3 million ounces of silver, up from the 2.17 million ounces garnered in the same period in 2018. The output includes 1.4 million silver ounces from the San Dimas mine, which was acquired by First Majestic in May 2018.

“Pure silver production increased 2 percent [quarter-on-quarter] to 3.3 million ounces as a result of higher grades at the San Dimas and La Encantada mines,” said President and CEO Keith Neumeyer.

3. S&P Global Calls for Record Gold Output in 2019

S&P Global says that 2019 will bring a record high for gold output, with an estimated 109.6 million ounces of the yellow metal expected to be produced this year.

According to a report from S&P Global, gold production climbed for the 10th consecutive year in 2018, with output hitting 107.3 million ounces of gold.

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“We believe the forecast growth of 2.3 million ounces in 2019 will be the strongest growth in the past three years, debunking commentary calling for peak gold,” said Christopher Galbraith, research analyst at S&P Global.

Also in the news

Also making news this week, Sibanye-Stillwater (NYSE:SBGL,JSE:SGL) announced on Wednesday (April 17) that a five month strike by the Association of Mineworkers and Construction Union at the miner’s gold operations in South Africa has finally come to a conclusion.

“Both parties have acknowledged that it is in their interest to rebase and develop a constructive relationship going forward,” Sibanye stated in a press release.

Both sides have made compromises and promises with the hope that the post-strike agreement will be mutually beneficial.

Additionally, Newmont Mining’s US$10 billion acquisition of Goldcorp has officially closed.

The united company is now legally Newmont Goldcorp (TSX:NGT,NYSE:NEM), and has become the world’s leading gold company.

“We’ve met our goal to become the world’s leading gold business, and we’ll maintain that position by executing our winning strategy,” said CEO Gary J. Goldberg.

“That strategy focuses on constantly improving safety and efficiency at our current operations while we continue to invest in expansions and exploration to fuel next generation production. An equally important part of that strategy is to meet stakeholders’ expectations by continuing to lead the sector in value creation and sustainability performance,” he added. 

With the deal closed, Goldcorp’s listing on the Toronto Stock Exchange has been removed, with Canopy Growth (TSX:WEED,NYSE:CGC) becoming the first cannabis company to join the S&P/TSX 60 Index (TSX:TX60) in the gold legacy company’s place.

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.

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