The Weekly Dig - July 14, 2017
by Mick Carew, PhD, mcarew@haywood.com, Emma Boggio, MSC, CPA and CA, and The Haywood Mining Team
The Weekly Dig - Gold Regains Ground Amid Russian Scandal Regarding U.S. Election
Highlights:
With the summer weather upon us, market activity has been noticeably quieter as investors make the most of the Canada Day and 4th of July holidays; trading volume on the S&P/TSX Composite Index averaged 140 million shares this week compared to the average ~200 million shares per day seen over the last 6 months. Amidst the lull, mining equities were hit hard after last week saw several hawkish statements from the Federal Reserve suggesting further interest hikes this year. This sentiment was compounded this week by a rise in non-farm payrolls from 152,000 in May to 222,000 last month, eclipsing economists’ expectations indicating a robust US jobs sector. With the expectation of further interest rate rises this year, the gold price has suffered accordingly, hitting a low of US$1,207 per ounce on Friday before settling at US$1,213 (down 2.38%) per ounce at market close. Investors will now keep a watchful eye on whether the yellow metal breaks through the psychological US$1,200 per ounce level for the first time since March this year. As expected, gold equities suffered losses during the week; the S&P/TSX Global Gold Index fell below the 190 level for the first time since December 2016, finishing at 185.86 on Friday. Silver (down 6.86%) also fell sharply, while platinum fell 2.13% and palladium remained roughly flat for the week, finishing at US$907 and US$842 per ounce respectively. While gold and silver fell sharply, base metal prices had a mixed week; copper (down 2.12%) and nickel (down 5.26%) both fell to US$2.63 and US$4.03 per pound respectively while lead (up 0.25%) and zinc (up 1.35%) rose, both remaining above the US$1.00 per pound level and finishing at US$1.03 and US$1.27 per pound respectively. The UxC Broker Average Price remained above the US$20 mark, finishing at US$20.29 per pound while WTI crude fell 3.83%, finishing at US$44 per barrel on Friday.
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