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.
The price of December gold – the most actively traded contract – dropped by almost $80 to trade below $1,800 an ounce on Wednesday morning. By midday bullion had regained some of its footing but was still down just over 3% or $56.60, at 1,816/oz in New York as traders banked profits.
Gold has declined $120 in less than 24 hours after setting an intraday record of $1,923.10 an ounce on Tuesday. During August the metal added 12% as investors sought a safe haven from the slumping US economy and the continuing debt crisis in Europe.
Despite the losses many analysts believe gold will hit $2,000 an ounce soon as talk of another round of monetary stimulus or a direct injection into the economy as part of a jobs programme lead to more cheap money entering the financial markets.
MarketWatch quotes Matt Zeman, a senior market strategist at Kingsview Financial in Chicago: “Equities are sharply higher today, and Obama is coming on with his jobs address. We’ve seen a little but of a return of risk appetite, but not for long. I suspect buyers will come back bargain hunting again.”
