Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
Gold prices slipped over 1% on Thursday as the metal was weighed down by a stronger dollar and an uptick in bond yields following stronger-than-expected US economic data.
Spot gold was down 1.4% to $1,944.31 per ounce by 10:45 a.m. EDT, its lowest in two weeks. US gold futures dropped 1.3% to $1,945.30 per ounce in New York.
[Click here for an interactive chart of gold prices]
Data showed the US economy grew faster than expected in the second quarter as labor market resilience underpinned consumer spending.
A separate report from the Labor Department on Thursday showing initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 221,000 for the week ended July 22.
“There was a one and two punch on gold with a better-than-expected initial claims numbers showing that the strength of the US labor market is resilient,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, told Reuters.
“Then also that surprise upside expectation in GDP data as well shows you that if there is any recession, it’s just not no one seeing it right now. So it paves the way for higher for longer on interest rates.”
Following the data, the dollar index jumped 0.7% against its rivals, making gold more expensive for other currency holders. The benchmark US 10-year yield also climbed to 3.90%.
On Wednesday, the US Federal Reserve raised interest rates by 25 basis points as expected. Markets priced in 57% odds of the Fed holding rates for the rest of the year, according to the CME FedWatch tool.
Meanwhile, the European Central Bank (ECB) raised interest rates for the ninth consecutive time on Thursday and kept the door open to further tightening.
(With files from Reuters)
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