Yukon may assume Victoria Gold accident cleanup
Officials said Victoria must increase holding ponds and boost its treatment of cyanide-contaminated water from the landslide.
On Friday, gold rebounded sharply after data out of the US showed employment growth in the world’s largest economy is sputtering, pushing back any interest rate hike well beyond the summer.
The US created a meagre 38,000 new jobs in May, well below forecasts of an increase of 155,000 – the worst report in nearly six years.
Just before the announcement gold futures in New York for delivery in August was trading at $1,213 an ounce, but after the payroll figures the metal shot up nearly $30 an ounce in a series of massive trades.
In heavy afternoon trading gold built on the gains reaching an intra-day high of $1,246.10 an ounce, up 2.7% from yesterday’s close. The gold price has reversed nearly half its losses suffered in May after briefly scaling $1,300 at the end of April.
Year to date gold is up 17.5%.
Sentiment on gold markets had shifted dramatically in recent weeks after a number of hawkish pronouncements by Federal Reserve officials including chair Janet Yellen who said last week a rate rise during the summer months is probably appropriate.
Today’s jobs numbers will force a drastic rethink at the Fed and MarketWatch quotes Paul Mortimer-Lee, BNP Paribas’ chief economist for North America as saying the Fed will likely not be able to raise interest rates again until 2018:
“The shockingly low payrolls gain in May provides further evidence that the economy is showing clear signs of slowing”
The report caused a drop in government bond yields and hurt the dollar which usually move in the opposite direction of the gold price. The dollar fell to its lowest level since mid-May against a basket of currencies after the announcement and is now down nearly 5% in 2016 after three years of gains.
Higher interest rates raises the opportunity costs of holding gold as the metal provides no yield and any gains for investors must come through price appreciation.
