Precious Metals Weekly Round-Up: Gold Climbs as Greenback Eases

Goldprices gained momentumon Friday (January 25), as the US dollar ticked down on concerns surrounding global growth and political uncertainties, such as the US government shutdown.

Additionally, risks from an economic and political perspective will keep gold fairly supported going forward from this point.

“Gold seems to be finding a level and it is quite comfortable around it at the moment,” said Capital Economics Analyst Ross Strachan, adding that economic conditions still provide an underlying strength for the metal to surpass US$1,300,00 per ounce.

The dollar index fell 0.2 percent, with the greenback facing a tough year as growth stateside and globally remains under pressure and as the Federal Reserve moves closer to pausing its rate-hike cycle. 

On an intra-day basis, “gold is up due to a somewhat weaker dollar behind it,” said Commerzbank Analyst Daniel Briesemann.

The yellow metal is also being supported by investors as their concerns surrounding the impact of the longest US government shutdown in history, now in its 34th day, continues to grow.

As of 9:22 a.m. EST, gold was trading at US$1,291.70 per ounce.

Meanwhile, silverwas also up for the week, as it too was supported by a weaker US dollar.

As of 11:22 a.m. EST, silver was up 1.63 percent, sitting at US$15.55 per ounce.

As for the other precious metals, platinum was up 1.50 percent and as of 9:52 a.m. EST, the metal was trading at US$814.00 per ounce.

For its part, palladium is down after breaking through the US$1,400-per-ounce threshold in the previous week. The metal is down almost 4 percent and is headed for its first weekly loss in five.

As of 9:53 a.m. EST, palladium was trading at US$1,315.00 per ounce, still holding steady above gold.

Precious metals top news stories

Our top precious metals stories this week feature an interview with Mercenary Geologist Mickey Fulp at the Vancouver Resource Investment Conference,Gold Fields (NYSE:GFI,JSE:GFI) denying a report from Bloomberg which stated that the miner is looking to merge with rival AngloGold Ashanti (JSE:ANG) and a 2018 production report from Fresnillo (LSE:FRES).

1. VIDEO — Mickey Fulp: Gold Mega Deals “Certainly Aren’t Good for Investors”

Last week’s deal between Newmont Mining (NYSE:NEM) and Goldcorp (TSX:G,NYSE:GG) has generated a lot of commentary from market watchers, and not all of it is positive.

Coming down on the negative side at the recent Vancouver Resource Investment Conference, Mercenary Geologist Mickey Fulp commented that mega deals like this “certainly aren’t good for investors.”

“I don’t understand it,” he said. “You’ve taken two underperforming large gold majors and you’ve made a bigger company and you expect that to overperform now? I don’t quite understand it.”

Looking at the precious metals complex as a whole, Fulp said it’s “totally discombobulated — out of whack on the relative values of the metals.” He pointed in particular to palladium, whose price rise he believes is not sustainable. “I would submit that I would not want to be buying palladium right now, but I’m very much buying platinum.”

You can also click here to view our full VRIC 2019 playlist on YouTube.

2. Gold Fields Denies Report Suggesting Possible Merger with AngloGold

Gold Fields has denied a report from Bloomberg which stated that the miner is looking to merge with rival AngloGold Ashanti.

The company issued the rebuttal on Tuesday (January 22), in the aftermath of Bloomberg releasing news that Gold Fields allegedly desired to combine with its competitor in the wake of the recent massive mergers in the gold space.

“Gold Fields has taken note of the Bloomberg statement that it wants to combine with rival AngloGold Ashanti. This article is factually incorrect and we completely disassociate ourselves with this statement,” the miner noted in a brief press release.

3. Fresnillo’s Silver Production Climbs in 2018; Decline Expected This Year

Fresnillo (LSE:FRES), the world’s largest silver producer, achieved record silver production for 2018, with output rising 5.3 percent from 2017, the company announced on Wednesday (January 23).

The miner produced 61.8 million ounces for the year, including Silverstream. The output increase was largely thanks to 2018 being the first full year of operations at phase 2 of San Julián.

“Record annual silver production and a very strong gold performance does not mask what was a challenging year for Fresnillo,” stated Octavio Alvídrez, CEO.

Also in the news

Also making news this week is Barrick Gold’s (TSX:ABX,NYSE:GOLD) announcement that its Tongon mine, in Côte d’lvoire, achieved its revised production target of 230,000 ounces of gold in 2018.

This comes despite nine months of intermittent production caused by illegal strikes and social unrest.

Barrick President and Chief Executive Mark Bristow noted that the government-endorsed reconciliation agreement between the mine, the employees and the community was put in place in order to create an atmosphere in which operations would run as normal and good relations could be rebuilt.

“This should mark a new beginning for Tongon, and it is significant that the Minister of Mines, Jean Claude Kouassi, visited the mine to sign this agreement in the presence of representatives of all the stakeholders,” he said.

Additionally, Sierra Metals (TSX:SMT,NYSE:SMTS) announced its 2018 production results and set its guidance for 2019. A total of 2.3 million tonnes were processed by the miner — an increase of 16 percent from 2017.

“I am very pleased with the company’s strong Q4 production results, which contributed to a solid year of production in 2018. The company continues to reap the benefits of the successful operational improvement programs at all mines,” said Igor Gonzales, president and CEO.

In total, Sierra produced 2.7 million ounces of silver, up 17 percent from the previous year. Gold production climbed 25 percent from 2017 and the miner had an output of 7,743 ounces.

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