Buying Gold | <b>Gold</b> price drops as safe haven <b>buying</b> dries up again | MINING.com | News2Gold |
| <b>Gold</b> price drops as safe haven <b>buying</b> dries up again | MINING.com Posted: 21 Aug 2014 12:55 AM PDT On the Comex division of the New York Mercantile Exchange, gold futures for December delivery – the most active contract – came under heavy selling pressure losing more than $20 to $1,274.90 an ounce in pre-open trade Thursday, a two month low. The slide in the price of gold came after minutes of the last US Federal Reserve meeting released yesterday showed the US central bank opting for a more hawkish tone as the country's job picture continues to improve. Short term bond yields – negatively correlated with the gold price as the metal is not income producing – jumped the most since March on expectations that the bank might raise rates a bit sooner than expected. The dollar strengthened further following a 11-month high against a basket of currencies reached yesterday thank to a subdued US inflation outlook as the central bank continues to withdraw stimulus for the US economy. Gold and the US dollar usually move in opposite directions. Chairman Janet Yellen may shed more light on the future of US monetary policy on Friday during a speech at the Fed's annual gathering in Jackson Hole. The oil price has not benefitted much from the turmoil in the Middle-East and Eastern Europe sliding to fresh lows below $95, down from more than $106 a barrel at the end of June. Looking at the ratio between the gold price and the oil price which usually rise in tandem (rising oil prices pushes up inflation increasing demand for gold as a hedge), gold still looks undervalued by comparison. Since 1970 the average ratio – how many barrels of oil can be bought with one ounce of gold – is 15 compared with under 14 now, which suggests that despite the fall in crude and gold's over 6% rise in 2014, the metal remains relatively cheap compared to oil.  |
| Top Chinese <b>gold</b> miner sets aside $1bn for African <b>buys</b> | MINING <b>...</b> Posted: 20 Aug 2014 07:00 AM PDT The National Development and Reform Commission, China's powerful economic planning agency, in May put into effect a new regime to govern overseas investment, making it much easier for domestic companies to make acquisitions and set up joint ventures abroad. The so-called Order 9 scraps the approval process for deals worth less than $1 billion entirely, replacing it with a simple registration process, eases forex requirements and cuts out much of the bureaucracy. While no-one expects the floodgates to open for outbound Chinese M&A, there are definitely many companies, particularly in gold and copper, keen on diversifying globally. In June the president of state-owned China National Gold, the country's and the world's largest gold company, during a visit to North American mining hub Vancouver said the Beijing-based firm is actively on the hunt for global acquisitions and partnerships in gold, silver and copper. On Wednesday Zijin Mining Group, China's foremost listed gold miner, joined the fray saying it has built up a warchest of up to $1.3 billion for acquisitions this year, particularly in Africa. Zijin management in a press conference said Zijin will seek overseas financing for purchases and is interested in gold projects with more than 100 tonnes of the precious metal, while copper projects with more than 1 million tonnes of reserves will be considered: "We are seeing some buying opportunities in Africa and are examining related infrastructure development and geopolitical risks there," Chief Executive Officer Wang Jianhua said in an interview. "What we are interested in buying are those on the world gold mining belt with big sizes." |
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