Ramp Metals plunges after assays fail to repeat Saskatchewan gold discovery
Ramp is betting on a geological trend 30 km southwest of the historical Rottenstone open pit mine.
Gold’s blistering run came to a halt on Wednesday after a key US inflation report signalled a likely delay in Federal Reserve interest rate cuts until later in the year.
Spot gold slid 0.6% to $2,354.80 per ounce by 1:50 p.m. EDT, retreating below the key $2,350 level. US gold futures were also down 0.3% at $2,354.80 per ounce.
The pullback comes on the back of a 0.4% rise in the core consumer price index, according to government data Wednesday. This measure, which economists view as a better indicator of underlying inflation than the CPI, has now advanced 3.8% from a year ago.
The hot print in price pressures means that interest rates may remain high for a longer period of time, which hurts the appeal of non-yielding assets like gold. Both the US Treasury yields and the dollar advanced after the print, sending bullion down by as much as 1.4% to $2,320.12 an ounce.
Still, gold is holding at elevated levels, having registered all-time peaks for eight straight sessions including $2,365.35 an ounce on Tuesday. Since mid-February, the metal has gone up by nearly 17%.
The rally has left some onlookers puzzled because of the lack of any obvious triggers — especially as convictions on three quarter-point rate cuts faded fast. Heightened geopolitical risks in the Middle East and Ukraine, plus buying by central banks led by China, have added some bullish momentum for the precious metal.
Gold is partly helped by buying as some investors shifted focus “from the number of rate cuts to sticky and rising inflation,” said Ole Hansen, head of commodity strategy at Saxo Bank AS.
Hansen sees a short-term correction in bullion “given how far gold has traveled in a short period of time,” with a dip below $2,230 likely to trigger a round of long liquidation.
(With files from Bloomberg)
