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 for December delivery rose $50.10, or 2.7%, to $1,879.30 an ounce in midday trade in New York — within striking distance of the metal’s $1,891.90 settlement record set a week and a half ago. The jump comes after data showed the US added no jobs in August sparking renewed fears that the world’s biggest economy is heading back into recession.
Gold benefited because the weak numbers could lead to new policy-easing initiatives by the US Federal Reserve – a previous round of stimulus injected $600 billion into markets. Not even talk of gold sales by European central banks to ease their massive debt burden could dampen the enthusiasm for bullion. Between them Portugal, Ireland, Italy, Greece and Spain hold some 3,233 tonnes of gold, worth around €130bn.
Friday’s reading was the weakest in nearly a year and far below Wall Street expectations. This week minutes showed the US central bank had considered tying interest rate policy to a specific unemployment level, an unprecedented move. US unemployment was pegged at 9.1% in August versus a post-WWII average of 5.7%.
European CEO argues if sales are off the table, there are other ways for gold to be of use to heavily indebted countries. For example, former Italian prime minister Romano Prodi, proposed in August the creation of a euro bond backed by member states’ gold reserves.
