Newmont sells Ontario mine to Orla for $850 million
The addition of the Musselwhite mine to its portfolio elevates more than doubles Orla Mining's gold output to 300,000 ounces per year.
The gold price jumped to a three-and-a-half-month high above $1,320 an ounce on Friday, capping one of its best weeks in years.
Gold’s rise this year – it is up 9.8% so far – has been ascribed to a number of factors.
Some key technical levels have been breached, including the 200-day moving average on Friday which supposes further upward momentum.
Safe haven buying on turmoil in emerging markets boosted gold in January and continued strong physical demand from Asia has also provided a solid floor to the price.
But there are less obvious factors playing a role in gold’s rise says independent researcher Capital Economics in a note out on Friday titled “Weather can impact commodity prices in odd ways“:
“Of course, the main driver has been a revival of safe-haven demand triggered by the turmoil in emerging markets. But the adverse weather is probably the biggest single factor behind the recent run of disappointingly weak US economic data, which in turn has encouraged speculation that the Fed will keep monetary policy loose for longer, driving down bond yields and weakening the dollar (all positives for gold).”
Earlier this week Capital Economics reiterated its end-2014 forecast of $1,450 an ounce for gold, one of the more bullish predictions out there:
“We continue to expect further gains over the course of this year, helped by continued strong demand from China and an eventual easing of the import ban in India. Gradual tightening in US monetary policy could trigger fresh falls in 2015 and beyond, although the downside should be limited by the (probably rising) floor set by mining costs and an extended period of still (relatively) loose monetary policy across the developed world.”
Image of Schell beer by Aaron Landry
