Fed tests gold upleg
Gold’s outlook and fundamentals remain really bullish.
Mali shut its borders and recalled several ambassadors after West Africa’s economic bloc imposed sanctions on the gold-producing country for refusing to hold elections next month.
The government will “take all necessary measures” to respond to the sanctions, government spokesman Colonel Abdoulaye Maiga said in a statement read on national television on Monday. It urged the nation’s security forces to “remain mobilized” because of the possible deployment of Economic Community of West African States troops.
President Assimi Goita is expected to address the nation later on Monday, while the United Nations Security Council is scheduled to discuss Mali’s political crisis on Tuesday, according to a UN official in Mali.
Ecowas, as the bloc is known, on Sunday froze Malian assets at the region’s central bank and commercial lenders in member states, suspended non-essential financial transactions and ordered land borders be closed. The announcement came a week after the military-dominated government proposed a five-year transition period, in defiance of international pressure to prepare a return to civilian rule next month.
Mali is Africa’s third-biggest gold producer and companies including Toronto-based Barrick Gold Corp. and Vancouver-based B2Gold Corp. have operations in the country. The two companies didn’t immediately respond to requests for comment on what impact the sanctions may have on their operations.
“Miners operating in Mali should prepare for significant disruptions to their export routes and logistical supply lines as long as Ecowas maintains its ban on trade and financial exchanges with the country,” Verisk-Maplecroft analyst Alexandre Raymakers said in a research note. “Considering the importance of the gold mining sector as a source of revenue for Bamako, we do not expect the bloc to provide any exemptions to miners.”
(By Katarina Hoije)
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