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Top Stories This Week: Gold Price Hits Fresh High, Investment Funds Snap Up Copper
Mar. 28, 2024 05:00PM PST
Meanwhile, Alamos Gold announced plans to acquire Argonaut Gold in a "friendly" transaction that values Argonaut at US$325 million.
Gold's strong price action continued this week, with the yellow metal finishing just above US$2,230 per ounce ahead of the Easter long weekend — yet another new record in what's become a string of fresh highs.
The increase came even as the US Bureau of Economic Analysis released revised GDP numbers for Q4. The US economy grew at a rate of 3.4 percent during the period, which is higher than the previously reported 3.2 percent figure.
At the time of this writing, market participants were still waiting for Friday's (March 29) release of the latest US personal consumption expenditures (PCE) price index data. PCE, which is the US Federal Reserve's preferred measure of inflation, will help inform the central bank's decisions on interest rates in the months ahead.
Currently, CME Group's (NASDAQ:CME) FedWatch tool shows a 96 percent likelihood that the Fed will leave rates unchanged in May, and a 61 percent probability that it will cut to the 5 to 5.25 percent level in June.
Although gold's recent price momentum has been impressive, many of the experts the Investing News Network has spoken with believe it will really take off once the Fed begins cutting rates.
Bullet briefing — Gold M&A and copper
Alamos Gold to acquire Argonaut Gold
Alamos Gold (TSX:AGI,NYSE:AGI) announced on Wednesday (March 27) that it plans to acquire Argonaut Gold (TSX:AR,OTC Pink:ARNGF) in a "friendly" transaction that values Argonaut at US$325 million.
Once complete, the deal will see Alamos take ownership of Argonaut's Magino mine, which is located next to its Island gold mine in Ontario. According to Alamos, the integration of the two operations will unlock about US$515 million in synergies and will boost its gold output to 600,000 ounces per year.
Investment funds snap up copper
Investment funds are reportedly "stampeding" into copper as prices for the base metal remain elevated.
The rise kicked off midway through the month after Chinese smelters agreed to cut production — with raw material inputs more scarce than anticipated, they opted to join together to reduce their activity.
"Clearly, plenty of fund managers are buying into the change of narrative but whether others will join them depends on whether copper can consolidate its chart gains," wrote Andy Home of Reuters.
He said the move has reminded money managers about copper's supply/demand dynamics, which are seen tightening in the years to come. However, for now it remains to be seen whether other larger entities will jump into copper.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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