Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
The Toronto stock exchange ended trading Wednesday at a record high as gold mining shares strengthened and the U.S. Federal Reserve said it is unlikely to raise interest rates until 2015.
Meanwhile, the mining junior-laden TSX Venture Exchange added 2.74 points to close at 1,008.82, still down from a peak in early 2011 above 2,400 points.
The S&P/TSX composite index gained 53.36 points to 15,109.25. That beat the previous all-time closing high of 15,073 points set in June 2008, right before stocks plunged during the financial crisis.
This past week saw Islamic militants attack Iraq’s biggest oil refinery, resulting in speculation that sectarian violence in the country will push up oil prices and leading investors to seek gold as a safe haven.
In New York, gold futures for August delivery rose $5 to $1,277.80 an ounce in after hours trading. Goldcorp (TSE:G) was up 4% to $28.30 and Barrick (TSE:ABX) gained 2% to $18.88. Newmont (NYSE:NEM) also rose roughly 2% to $23.74.
The Canadian dollar climbed 0.12 of a cent to 91.17 cents U.S. on Wednesday. But the currency’s relative weakness is boosting exporter earnings.
The U.S. central bank said that it will continue its monthly bond buyback program but will reduce purchases from $45 billion to $35 billion a month amid signs of ongoing improvement in the nation’s economy.
The Fed said it will keep interest rates close to zero for some time after ending the asset purchases. Most economists predict no rate increase for at least a year.
