El Salvador lawmakers overturn mining ban Bukele called absurd
El Salvador became the first country in the world to ban all forms of metals mining in 2017.
Gold prices declined on Friday with the continued onslaught of the equities market, while US treasury yields bounced higher following release of better-than-expected jobs data for the month of August.
Spot gold was down 0.5% at $1,919.55 per ounce by 11 a.m. EDT, near a one-week low and on pace for a weekly loss of 2.2%. US gold futures slipped 0.3% to $1,931.20 per ounce, after briefly topping $2,000 earlier in the week.
In the long term, gold, which has gained about 25% so far this year, is still strong, but is “in need of a deeper correction”
Although equity investors continued their selloff from Thursday, which saw the biggest one-day decline in all major US indices since June, it did not help the investment case for safe-haven assets such as bullion.
“The job report will set the stage for all asset classes,” Saxo Bank analyst Ole Hansen told Reuters. “If the equity markets close on a weaker note after the report, and given the US is heading into a long weekend, we might see some strength in gold.”
Gold’s recent decline has been driven largely by gains in the US dollar coupled with some upbeat data, including robust manufacturing figures from the US and elsewhere, which kindled hopes for a fast economic revival from the covid-19 pandemic.
The dollar index steadied against rivals on Friday, making gold cheaper for those holding other currencies, halting a rally that set the greenback on track for its best week since mid-May.
“Since the recovery, movement in USD has stopped for the moment, that is a positive element for gold,” ActivTrades chief analyst Carlo Alberto De Casa said.
In the long term, gold, which has gained about 25% so far this year, is still strong, but is “in need of a deeper correction,” Hansen added.
(With files from Reuters)
