The Weekly Dig - June 9, 2017
by Mick Carew, PhD, mcarew@haywood.com, Emma Boggio, MSC, CPA and CA, and The Haywood Mining Team
The Weekly Dig - Gold Falls Following U.K. Election and Comey Testimony
Highlights:
Thursday had been earmarked as a key market driver this week as investors waited for former Director of the Federal Bureau of Investigation (FBI) to deliver his testimony on Capital Hill. The testimony had been widely anticipated, with democrats eager for more ammunition against Donald Trump, who has pursued the reversal of key democrat policies including the Paris climate agreement and Obamacare. The Trump administration on the other hand has been looking for ways to divert attention away from continued accusations of White House and Russian collusion during the November 2016 election. Markets were relatively quiet during the testimony as uncertainty remains as to whether the President attempted to obstruct the investigation into former National Security Adviser Michael Flynn. Hours later, the U.K. election produced a surprise result, with Theresa May’s conservative party failing to maintain its majority, despite calling the election 3 years earlier than required. Despite the uncertainty the result could clash with Brexit negotiations expected to begin soon, the price of gold fell during the week as the U.S. dollar gained ground against a basket of other currencies; the price of gold reached a high of US$1,295 per ounce on Tuesday before retreating to finish at US$1,267 per ounce at market close on Friday. Closer to home, the Bank of Canada kept its key interest rate at 0.5%, while highlighting concerns over trade disputes with the U.S. and elevated housing prices dampened any enthusiasm for a rate hike. It was a mixed week for precious and base metals; silver (down 1.93%) and platinum (down 1.45%) were both lower for the week, while palladium finished 4.88% higher. Copper (up 2.41%) gained ground this week while both nickel and zinc were up slightly to finish at US$4.05 and US$1.14 per pound respectively. There was no reprieve for oil prices this week; WTI crude has fallen over 13% in just over two weeks as supply concerns continue, and finished at US$46 per barrel on Friday. Finally, the UxC Broker Average Price finished the week at US$19.78 per pound.
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