Precious Metals Weekly Round-Up: Gold Gains on Weaker Greenback

Both gold and silver prices edged up on Friday (September 14) after the US dollar dipped on weaker-than-expected US inflation data and a slight recovery in emerging markets.

As of 11:04 a.m. EST, the yellow metal was trading at US$1,197.90 per ounce. It hit its highest level since August 28 in the previous session, when it climbed to US$1,212.65. As for the white metal, it was trading at US$14.13 per ounce as of 11:07 a.m. EST.

Silver was the precious metal making the most news this past week, sinking to its lowest level in two and a half years on Tuesday (September 11).

“There’s been a lot of people that have given up on the silver market, and that is verified by the amount of retail sales in silver,” David Morgan of the Morgan Report told the Investing News Network (INN).

Morgan noted that the dip to under US$14 was unexpected, and was driven more by selling pressure than by buying pressure. He also told INN that he anticipates that the white metal will begin making significant gains again by early 2019.

As for gold, Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, stated, “[w]e’ve seen quite a bit of weakness in the dollar which has supported gold, but we’re not out of the woods yet.”

He added, “[w]he fact that gains weren’t stronger has still got to do with gold’s focus on the Chinese renminbi, which remains a bit challenged, but also that the market is starting to look forward to the next US rate hike.” Analysts say gold is showing a close correlation with that currency.

For their part, platinum and palladium were up slightly for the week. As of 11:19 a.m. EST, platinum was trading at US$799 per ounce, while palladium landed at US$982 per ounce.

Precious metals top news stories

Our top precious metals news stories this week cover RNC Minerals (TSX:RNX) reconsidering its options for its Beta Hunt mine after discovering 9,000 ounces of gold, and Tahoe Resources (TSX:THO,NYSE:TAHO) stating it will continue conversations with Guatemalan officials and locals in order to resolve a dispute and resume operations at its Escobal silver mine.

As mentioned, we also had Morgan weigh in on silver’s dip to a two-and-a-half-year low.

1. RNC Reconsiders Beta Hunt Options After 9,000-ounce Gold Discovery

Toronto-based RNC Minerals discovered 9,000 ounces of high-grade gold at its Beta Hunt mine, causing a retraction from exclusive discussions with a preferred bidder for the Western Australian mine.

RNC announced that it has produced 9,250 ounces of high-grade gold from a 44-cubic-meter cut on the 15 level at Beta Hunt — that amounted to more than 70 ounces per tonne, or 2,200 grams per tonne. The announcement caused the company’s share price to rise 100 percent.

“Recovering 9,250 ounces of high grade coarse gold from a single cut on the 15 level at our Beta Hunt mine, including specimens which could rank among the largest ever discovered, underlines the importance of this discovery,” said Mark Selby, president and CEO.

2. Tahoe to Continue Talks with Guatemalan Officials to Reopen Mine

Tahoe Resources plans to continue conversations with Guatemalan officials and locals in order to resolve a dispute and resume operations at its Escobal silver mine.

Last week, the Guatemalan Constitutional Court upheld the suspension of licenses at Escobal. Jim Voorhees, Tahoe’s CEO, stated that the ruling was both “disappointing” and not the result expected.

Voorhees explained, “we are pleased that a resolution has finally been reached after a prolonged period of inaction in the legal system. The final resolution provides a comprehensive path forward.”

3. David Morgan Weighs in on Silver’s Dip to 2.5-year Low

While silver prices gained slightly on Wednesday (September 12), they fell below US$14 to a two-and-a-half-year low in the previous session.

According to Morgan the reasons behind Tuesday’s decline are not completely cut and dry. However, in his opinion, the “why” is “very basic” and has to do with more selling pressure than buying pressure. “There’s been a lot of people that have given up on the silver market, and that is verified by the amount of retail sales in silver,” Morgan told INN.

In other precious metals news

Also making news this week was Gold Fields (NYSE:GFI,JSE:GFI), which plans to extend the life of its Cerro Corona gold mine in Peru through 2040.

With the extension will come an investment of at least US$240 million in the mine.

“We’re doing studies with Peruvian consulting firms and international engineering companies to extend the life of Cerro Corona until 2040,” said Luis Rivera, vice president at the company. “It’s going to involve the use of new technologies,” he added.

The miner also made news this week when it was rankedas the top South African mining company and the third-best gold company on the Dow Jones Sustainability Index (DJSI) benchmarking database.

The DJSI report, released on Thursday (September 13), shows that Gold Fields’ sustainability practises rank with the best of resource companies worldwide. It is ranked fourth among 60 mining companies assessed and the third-best global gold company.

“Our continued strong performance on the DJSI shows that we are on the right track in terms of fully integrating sustainability into our business, but there always will be areas of improvement, particularly in further strengthening our relations with impacted host communities,” stated CEO Nick Holland.

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