The Weekly Dig - April 28, 2017
by Mick Carew, PhD, mcarew@haywood.com, Emma Boggio, MSC, CPA and CA, and The Haywood Mining Team
Gold Recovers Slightly as US Government Releases Perfunctory Tax Plan
Highlights:
On Wednesday, gold futures traded around their lowest level in just over two weeks, as the dollar firmed, bond yields rose and stocks looked to cautiously test new highs. However, after somewhat subdued trading ahead of what the Trump administration had teased as a “massive” tax plan, markets appeared to settle Wednesday following the plan’s release. The S&P 500 and Down Jones Industrial Average both finished slightly lower for the day following Treasury Secretary Steven Mnuchin and White House economic adviser Gary Cohn’s outline of the plan. Although the announced proposal includes a 15% corporate rate, down from the current 35% rate, and if enacted would have the potential to boost US economic growth considerably, the plan that was presented was only a one-page set of bullet points, containing around 200 words. Simultaneous to this rather lack luster proposal, came commentary regarding the US potentially withdrawing from NAFTA and the country’s trade complaints about Canadian lumber and imported steel. Following the release of the proposal on Wednesday, the price of gold edged up to US$1,269 before finishing the week at US$1,268 per ounce. It was a mixed week for other precious metals with silver (down 4.0%) and platinum (down 2.66%) both finishing the week down at US$17.24 and US$947 per ounce, while palladium finished up 3.96% at US$827 per ounce. Meanwhile, base metals recovered slightly this week, with copper (up 2.04%), nickel (up 1.16%), lead (up 6.17%), and zinc (up 1.79%), each finishing the week at US$2.59, US$4.27, US$1.04, and US$1.19 per pound respectively. It was a negative week for WTI crude, which continued to fall this week (down 0.87%) to finish at $49.19 per barrel while the Broker Average Price for uranium finished the week down 0.83% at US$22.75.
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