Resolute Mining forks out further $50 million to Mali for detained employees
The miner's top boss Terence Holohan and two other employees were released by Mali government, the company said in a statement on Nov. 21.
After a dramatic trading day on Friday when gold shot almost $60 an ounce higher, Monday turned out to be soggy affair for the precious metal with no fresh news to drive the market.
Gold for August delivery was trading down $4.80, or 0.3% at $1,616.90 an ounce on the Comex division of the New York Mercantile Exchange by mid-afternoon Monday, after earlier hitting a high of $1,630.
The raft of bad US economic numbers out last week that culminated in a terrible employment report on Friday saw the gold price jump $57 an ounce, hurtling past the psychologically important $1,600 level for the first time in three weeks.
Traders are betting that the much weaker than expected jobs numbers in the US would strengthen the hands of Fed doves who are calling for an extension of quantitative easing programs. Friday’s report was the final employment numbers the US Federal Reserve are able to take into account before June’s meeting to decide on monetary policy direction.
Operation Twist, announced in September that pumped $400 billion into markets, expires this month. The program followed QE1 which began in December 2008 and QE2 when the Fed bought $2.3 trillion of bonds. Before QE1 an ounce of gold was worth $837. Spot gold is trading flat for 2012 after an uninterrupted bull run of 11 years.
Reuters on Monday reports on a change in the trading pattern in the gold market and argues that gold may be regaining its safe haven status:
“Up until very recently, lower U.S. bond yields were also accompanied by lower gold prices… primarily because as the euro zone sovereign crisis intensified, capital moved into U.S. Treasuries and other perceived safe government bonds,” HSBC said in a note. “As the dollar rallied in reaction to capital inflows, gold prices, which are negatively correlated with the U.S. dollar, fell.”
“Gold prices appear to have very recently broken away from this relationship and have turned higher despite further declines in U.S. Treasury yields, which have reached 60-year lows,” it said. “Low U.S. and German bond yields leave investors with few quality assets to choose from and may benefit gold.”
Read more about QE in the EU, Grexit and Operation Twist and the effect on the gold price here >> and here >>
Comments
Ed233
How can gold rally lose steam when its just getting under way. What are you talking about???????????????????????// Do some research to get the real story as to what is right now happening. Your title doesn’t cut it.