Precious Metals Weekly Round-Up: Gold Continues its Reign

Gold steadied on Friday (June 7), but is still on track for its highest week since March 2018 as global growth concerns make investors seek out the safe haven nature of the precious metal.

Global growth concerns are accumulating from expectations that a US rate cut will happen and as the possibility of a trade war lingers.

Despite the yellow metal’s continual climb, analysts still believe that there are obstacles in gold’s way to reaching higher levels.

“We have had quite a move higher earlier this week, but we are moving towards levels where the market will struggle to go much higher,” said Warren Patterson, analyst at ING (NYSE:ING).

Gold has made gains of over 2 percent for the week and is currently experiencing the best seven day stretch since March of last year.

“Overall sentiment is still fairly supportive for the gold market,” Patterson added.

The analyst believes that gold’s recent price rally is largely due to the current trade spats between the US and China and the US and Mexico. He noted that investors are also keeping an eye on a potential interest rate cut from the US Federal Reserve.

Looking ahead, market watchers will turn their attention to US non-farm payrolls data, which will be released at 12:30 p.m. EDT on Friday. The report should give insight on what may happen with interest rates. As of 9:26 a.m. EDT on Friday, gold was trading at US$1,342.90 per ounce.

Meanwhile, silver followed gold’s lead on Friday, gaining on the back of ongoing geopolitical concerns.

The white metal was trading just under US$15 per ounce on Friday, on track for its best week since late January. As of 9:35 a.m. EDT, silver was trading at US$14.97.

As for the other precious metals, platinum is up close to 1 percent for the week and is on track for its first weekly gain in the last seven weeks. As of 10:02 a.m. EDT, the metal was trading at US$808 per ounce.

Palladium also climbed, edging up 1.05 percent for the week. As of 10:05 a.m. EDT, palladium was trading at US$1,346 — a gain of close to US$20 from the previous week.

Precious metals top news stories

Our top precious metals stories this week include gold reaching two month highs, Chaarat Gold (LSE:CGH) rising close to 4 percent on Tuesday (June 4) after publishing an updated feasibility study and shares of Dacian Gold (ASX:DCN) plummeting over 67 percent on Wednesday (June 5).

1. Gold Reaches 2 Month High as Global Trade Tensions Mount

Gold climbed over US$1,300 on Monday (June 3) as investors grew concerned that ongoing US-China trade tensions and Washington’s threat of tariffs on Mexico could negatively affect the global economy.

Investors turned to the precious metal as a safe haven to ease the effects of the current geopolitical turmoil, pushing gold prices over a two month high.

“Gold has also cruised pretty seamlessly across important levels such as US$1,293 and US$1,300,” said Ross Norman, chief executive at Sharps Pixley.

2. Chaarat Increases Gold Reserves at Tulkubash by 39 Percent

Chaarat Gold rose close to 4 percent on Tuesday after publishing an updated feasibility study showing that gold reserves at its Tulkubash asset have increased by 39 percent.

The updated feasibility study on the oxide gold project, which is located in Kyrgyzstan, has boosted reserves to 22.2 million tonnes for a total of 358,000 ounces of gold.

“An almost 40 percent year-on-year increase in Tulkubash’s gold reserves demonstrates the remarkable future growth potential of the Tulkubash project. To achieve this whilst also reducing the level of capital expenditure required to bring the mine into production again illustrates the quality of this asset,” said CEO Artem Volynets.

3. Dacian Gold Crashes After Cutting Production Guidance

Dacian Gold plummeted over 67 percent on Wednesday after it announced it is lowering its production guidance for the June quarter at its Mount Morgans mine.

The company revealed that production guidance at Westralia, an area of Mount Morgans, has been dropped to a range of 36,000 ounces to 38,000 ounces of gold, down from the original guidance of 50,000 ounces to 55,000 ounces.

The miner blamed the revision on underground contractor performance issues that caused lower productivity than Dacian had anticipated, as well as a decline in grade performance.

Also in the news

Also this week, Reuters reported that Toro Gold has hired Raymond James (NYSE:RJF) to explore the possibilities of putting itself up for sale after walking away from previous plans to list its shares on the London Stock Exchange.

However, two sources close to the matter have stated that attracting buyers won’t be easy for the miner, as it has only has one producing asset in Senegal and is targeting a valuation of up to US$300 million.

The company had previously begun the process of listing in London last year, but it is now exploring a sale as initial public offerings of small-cap miners are no longer generating interest.

Additionally, Australian miner Mincor Resources (ASX:MCR,OTC Pink:MCRZF) rose over 6 percent after the company announced that it will be ceasing operations at its Widgiemooltha gold asset. The miner stated that after reviewing the mine, it will be stopping gold production in order to shift its core focus to restarting nickel sulfide production in the Kambalda district.

The company plans to cease operations on August 1 of this year.

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