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Gold is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold Consolidates Recent Gains Ahead of Fed Rate Decision
Gold appeared to be consolidating this week’s gains today, with the Comex contract relatively unchanged from yesterday’s close, changing hands at $1,016. Earlier in the session gold futures once again tested the $1,020 level, however global market appear generally cautious ahead of this evenings US Federal Reserve (‘The Fed’) Rate decision. Like Gold the US Dollar is largely unmoved as it continues to trade near annual lows throughout the course of today’s trading.
The Fed is widely expected to maintain current rates; however analysts and investors are expected to scrutinise the tone of the statement. Analysts will gauge the Fed’s attitude towards the sustainability of the recent unprecedented economic stimulus.
Depending on the detail and tone of the Fed’s reaction, the US economy‘s growth prospects and the Dollar’s inflation risk will no doubt come under speculation. Gold investors are expected to remain poised ahead of today’s meeting which is scheduled for 14:30 Eastern Time (18:30 BST).
In London this morning, UK listed gold equities have generally maintained yesterday’s gains.
Gold producer Randgold Resources (LSE: RRS) and Mid-tier precious metal operator Peter Hambro Mining (LSE: POG) are both consolidating their recent moves and are unchanged on the day, while dual-listed Canada-based Yamana Gold (LSE: YAU NYSE: AUY) continues to move independently - its shares were slightly weaker this morning, slipping more than 1.5% to trade at £6.65. Centamin Egypt (AIM, ASX & TSX: CEY) also came under pressure, falling around 1.5%.
In London’s AIM market junior gold equities were more animated than their main market counterparts.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) was among the top performers this morning gaining almost 7%. While Ariana Resources (AIM: AAU) recouped some of yesterday’s losses, rebounding nearly 6%.
Meanwhile dual listed, Philippines focused Medusa Mining (AIM & ASX : MML) followed on from their Australian gains, adding 4.5% to trade at £1.93. Fellow Asian based gold producer Avocet Mining (AIM: AVM) was also stronger, rising around 4.5 % by lunchtime.
Shares in Australia focused Norseman Gold (AIM & ASX: NGL) were also positive today, adding to yesterday’s gains, rising 3%. Similarly Central China Gold (AIM: GGG) also rose almost 3%. Uruguay Minerals (AIM: UGY), Highland Gold (AIM: HGM) and Shanta Gold (AIM: SHG) also put in moderate gains.
Elsewhere a few gold equities had a less productive trading session this morning.
Algeria focused GMA Resources (AIM: GMA) squared off a volatile few sessions as their mixed half year results failed to live up to investor speculation in Tuesday’s trading. The share price remains higher than the last week, despite dropping around 16% this morning.
