Gold Prices Surge After Fed Minutes and Geopolitical Tensions
FinancialBuzz.com News Commentary
17 Aug, 2017, 09:00 ET
NEW YORK, August 17, 2017 /PRNewswire/ --
Gold prices gained yesterday, while U.S stocks were near flat after the Federal Reserve Minutes suggested a division within the Central Bank regarding sluggish inflation and the strategic path on interest rate hikes. According to a report by MarketWatch, the Central Bank wants to start unwinding its $4.5 trillion asset portfolio. The low inflation readings are a sign of warnings for a few officials, who noted that the Fed might be patient before raising interest rates any further. In addition, political tensions from the Washington D.C. may slow down the President's pro-growth agenda. The political climate in Washington has also increased the demand for gold, as it is a safe-haven asset. Nexus Gold Corp. (OTC: NXXGF), Harmony Gold Mining Co. (NYSE: HMY), Yamana Gold Inc. (NYSE: AUY), Eldorado Gold Corp (NYSE: EGO), B2Gold Corp (NYSE: BTG)
On Wednesday, the president disbanded White House advisory groups after several CEOs stepped down in protest. "The acceleration in gold's gains toward the regular session close was definitely due to the wave of resignations by CEOs from [President's] business council," said Brien Lundin, editor of Gold Newsletter according to MarketWatch. "However, the minutes from the Fed's last meeting also had a dovish tone, and this helped gold to rise even further."
Nexus Gold Corp. (OTC: NXXGF) is also listed on the TSX Venture Exchange under the symbol 'NXS'. The company last month announced that it has entered a letter of intent with Belemyida SA, pursuant to which Nexus will acquire the right to earn up to a 100-per-cent interest in the Rakounga gold property located in Burkina Faso, West Africa.
The 250-square-kilometre Rakounga gold property is contiguous to the company's Bouboulou gold concession. The property borders Bouboulou on the west and south sides and hosts the Bouboulou 1 gold showing, which is the southern extension of the Bouboulou 2 trend. Bouboulou 1 is an active orpaillage with shaft workings that extend down approximately 80 meters.
Following the acquisition of a 90-per-cent interest in the property, Nexus will have the option to acquire the remaining 10-per-cent interest in the property through a cash payment of $1-million (U.S.) with a 1-per-cent net smelter return royalty remaining with the optionor.
"This is a substantial addition to the land package at Bouboulou, effectively making the project almost 300 square kilometers in size. The acquisition allows us to follow the Bouboulou 2 and Pelatanga-Rawema trends to the southwest," said President and Chief Executive Officer, Peter Berdusco. "This addition is important when you consider how this might influence the goal of establishing a resource at Bouboulou. There is significant artisanal activity in this new area, which indicates gold mineralization continues along the established trends for some distance. Our exploration programs will determine to what extent and obviously at what economic level, but we are excited at the potential value this strategic addition brings to the company's growing portfolio. We are looking forward to executing the definitive agreement in the coming weeks."
Harmony Gold Mining Co. (NYSE: HMY) through its subsidiaries, is engaged in gold mining and related activities, including exploration, extraction and processing. The company announced this week a trading statement for the year ended 30th June 2017. According to the statement, Harmony's year-on-year financial performance and cash flow was strengthened by gains recognized on the gold and currency hedges. Headline earnings per share ("HEPS") are expected to be between 20 and 23 US cents per share, which is between 35% and 55% higher than the headline earnings of 15 US cents per share reported for the previous comparable period.
Yamana Gold Inc. (NYSE: AUY) is a Canadian-based gold producer with significant gold production, gold development stage properties, exploration properties, and land positions throughout the Americas including Canada, Brazil, Chile, and Argentina. Earlier in July the company reported earnings for the second quarter of 2017. Yamana's total production was 244,607 ounces of gold from the company's six producing mines. Production from the six mines increased by 13% compared to the first quarter of 2017. The Company also produced 1.32 million ounces of silver, representing an increase of 22% compared to the first quarter of 2017, and 29.1 million pounds of copper, representing an increase of 10% compared to the first quarter of 2017.
Eldorado Gold Corp (NYSE: EGO) is a leading intermediate gold producer with mining, development and exploration operations in Turkey, Greece, Romania, Serbia, Canada and Brazil. This July the company announced the successful completion of the plan of arrangement involving Integra Gold Corp. originally announced on May 15, 2017. The Arrangement was approved by the shareholders of Integra at its special meeting on July 4, 2017 and received approval from the Supreme Court of British Columbia on July 7, 2017. Eldorado's President and CEO, George Burns, commented, "This is a very important transaction for Eldorado and we are pleased with the votes of support from Integra shareholders. Eldorado is looking forward to expanding our growing business to Canada. Our experience in building and operating mines, combined with the experience from our new team in Quebec, will enhance our long-term growth profile and value proposition for all stakeholders."
B2Gold Corp (NYSE: BTG) on august 9th announced its operational and financial results for the three and six months ended June 30, 2017. The Company generated net income of $19.3 million ($0.02 per share) in the quarter compared to a net loss of $11.8 million (negative $0.01 per share) in the same quarter last year. Adjusted net income was $12.9 million ($0.01 per share) in the second quarter of 2017 compared to $29.0 million ($0.03 per share) in the prior-year quarter. For the first-half of 2017, consolidated gold revenue was $310.6 million on sales of 251,674 ounces at an average price of $1,234 per ounce compared to $309.1 million on sales of 251,728 ounces at an average price of $1,228 per ounce in the first-half of 2016.
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