Precious Metals Weekly Round-Up: Gold Climbs After Fed Chair Speech

Gold rebounded on Friday (August 24) after US Federal Reserve Chair Jerome Powell said gradual interest rate hikes remain appropriate as the US economy continues its strong performance.

Speaking at a research symposium in Jackson Hole, he added that he is prepared to do “whatever it takes” if inflation becomes unanchored to the upside or downside, “or should crisis threaten again.”

Powell’s comments put the US dollar under pressure, supporting gold demand. That’s because a weaker greenback makes commodities priced in dollars cheaper for investors using other currencies.

“The dollar is behind the rebound in gold, but it is still locked between US$1,180 and US$1,200, waiting for clear direction,” said ActivTrades Chief Analyst Carlo Alberto De Casa.

As of 12:00 p.m. EST, the yellow metal was up 0.1 percent, trading at US$1,207.80 per ounce.

“Overall we see gold prices stabilizing at current levels, with the probability of a short-covering rally increasing substantially,” ANZ analysts said in a note.

Looking over to silver, the white metal was up 1.7 percent on Friday, reaching US$14.72 per ounce. Meanwhile, platinum gained 1.9 percent to US$789.90 per ounce and palladium increased 2.1 percent to US$934.80 per ounce.

Precious metals top news stories

Our top precious metals news stories this week included new gold discoveries at Sabina Gold and Silver’s (TSX:SBB) Back River project and at Great Bear Resources‘ (TSXV:GBR) Ontario-based Dixie project. INN also explored whether silver has the potential to outperform gold this year in a two-part series.

1. New Discovery at Back River Boosts Sabina’s Share Price

Sabina Gold and Silver’s share price was on the rise on Monday (August 20) after the company released the first results from summer exploration drilling at its Back River project.

According to the company, a “significant new high-grade gold discovery” has been identified 1 kilometer to the west of the Nunavut-based project’s Goose main deposit.

2. Great Bear Soars on High-grade Gold Discovery at Dixie

Great Bear Resourcesclosed Wednesday (August 22) up 63.89 percent after reporting a new high-grade gold discovery at the Hinge zone of its Ontario-based Dixie project.

According to the company, drill hole DHZ-003 returned 16.35 meters of 26.91 g/t gold, including separate subintervals of 5.05 meters of 51.39 g/t gold and 1 meter of 112.63 g/t gold.

Chris Taylor, Great Bear’s CEO, explained that the company saw that the potential for a “transformative” discovery at Dixie when it “noted structurally controlled high grade gold within quartz veins, flanked by red-brown hydrothermal biotite alteration” — those and other identified traits are characteristic of the high-grade gold deposits found in the region.

3. Will Silver Outperform Gold? Part 1 and Part 2

Will silver outperform gold? In this two-part series, INN examines silver’s role in the markets over the last 30 years compared to gold, and why many insiders believe that the white metal is now prime to outperform the yellow metal.

While both silver and gold are precious metals, and are often impacted by the same influences, the two metals have taken different paths in terms of their perceived value in the market.

Since the first silver coin was minted on October 15, 1794, the white metal has been in a power struggle of sorts with gold.

While the metals generally rise and fall at the same time, there have been only a few moments in silver’s history where it has been able to outperform gold. Even so, many insiders believe that the markets are on the precipice of favoring silver, allowing it to be the top performer.

In other precious metals news

Also in precious metals news this week, gold producer Sibanye-Stillwater (NYSE:SBGL) reported positive first-half results, with basic earnings of 77 million rand and headline earnings of 101 million rand.

Another gold miner, ASX-listed Newcrest Mining (ASX:NCM), released prefeasibility study results on the expansion of the Cadia operation in New South Wales, which will require an estimated capital investment of $598 million.

Meanwhile, the World Gold Council (WGC) published a report saying the gold price may bounce back after touching a 20-month low on emerging-market currency depreciation.

The WGC says gold may rebound owing to both technical and fundamental reasons, which include an unusually short market, financial market uncertainty remaining and natural buyers that may step in.

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

Editorial Disclosure: Great Bear Resources is a client of the Investing News Network. This article is not paid-for content.