Precious Metals Weekly Round-Up: Gold Price Climbs Above US$1,200 per Ounce

Gold and silver prices were steady on Friday (October 5) ahead of the monthly US employment report that will most likely give insight into if there will be further monetary tightening or not.

As of 9:57 a.m. EST, the yellow metal finally broke the US$ 1,200 mark and was trading at US$ 1,204.00 per ounce setting it on track to make its biggest weekly gain in six weeks. As for the white metal, it was up slightly, trading at US$ 14.66 per ounce as of 10:00 a.m. EST.

Despite the weekly gain, gold has fallen over 12 percent from its peak in April thanks to the greenback’s strength that has stemmed from a thriving US economy, rising US interest rates and fears of a global trade war.

“The fear is that the rising dollar is going to cause a huge rout in the emerging markets and investors want to hedge that risk,” said Naeem Aslam, Think Markets UK chief markets analyst .

Rising US government bond yields have also been weighing on the precious metals, as they make treasuries more attractive to investors seeking assets that gain a return as opposed to the yellow metal, as it earns nothing and costs money to both store and insure.

“We expect that a topping out of US real yields will begin to put a floor under gold prices starting in 2019,” said Sabrin Chowdhury, commodities analyst at Fitch Solutions.

For their part, platinum and palladium were both flat on Friday. As of 10:45 a.m. platinum was trading at US$ 822 per ounce, while palladium’s steady climb paused, landing at US$ 1,070 per ounce.

Precious metals top news stories

Our top precious metals stories this week featured platinum miner Lonmin (LSE:LMI) selling its 6.8-percent stake in Canadian junior Wallbridge Mining (TSX:WM) to Eric Sprott in a US$ 3.97-million deal, shares of junior miner White Gold (TSXV:WGO) jumping 21 percent after the company uncovered multiple high-grade gold intercepts at its Vertigo target on the JP Ross property in the Yukon and an interview with Charles Cooper, head of mine economics at Metals Focus.

1. Lonmin Sells Wallbridge Shares to Eric Sprott for US$ 3.97 Million

Platinum miner Lonmin (LSE:LMI) sold its 6.8-percent stake in Canadian junior Wallbridge Mining to Eric Sprott in a US$ 3.97-million deal.

Lonmin, which is in the process of being acquired by Sibanye-Stillwater (NYSE:SBGL,JSE:SGL), has released its 24,042,895 shares in Wallbridge to Sprott, who will increase his stake in the company from approximately 9.4 percent to 16.1 percent.

“We are pleased to see the increased level of interest in our company as evidenced by the trading volume over the last few weeks. We are also encouraged by Mr. Sprott’s support, believing in our company and our Fenelon gold property,” stated Marz Kord, president and CEO of Wallbridge.

2. White Gold Jumps Over 20 Percent on Drill Results

Shares of junior miner White Gold surged 21 percent after the company uncovered multiple high-grade gold intercepts at its Vertigo target on the JP Ross property in the Yukon.

On Tuesday (October 2), the company said it had intersected 23.44 grams per tonne gold over 24.38 meters from surface, including 59.3 grams per tonne gold over 3.05 meters from surface, 39.4 grams per tonne over 3.05 meters from 12.19 meters depth and 26.1 grams per tonne gold over 4.572 meters from 19.81 meter depth from the JPRVERRAB18-014 hole.

“This appears to potentially be one of the most significant and interesting discoveries in the White Gold district to date,” stated Shawn Ryan, chief technical advisor.

3. Is it Time to Stop Investing in Major Gold Miners?

With production growth falling and few new projects in the pipeline, what’s the investment appeal of major gold miners right now?

Charles Cooper, head of mine economics at Metals Focus, addressed that issue at last week’s Denver Gold Forum, commenting, “the question I suppose you would want to ask is, ‘why would I be investing’ or ‘why would I want to look at’ the major mining companies if their production growth is falling … and they’re not returning much money in terms of dividend, or share buybacks to the investor community.”

He continued, “the answer is, well, maybe longer term you look at that as a stability factor — you might want to put your money in long-term stability. But at the moment it’s fairly unattractive.”

In other precious metals news

Also making news this week is gold miner Doray Minerals (ASX:DRM) as it plans to sell the Andy Well gold project in Western Australia, to Canadian gold miner Galane Gold (TSX:GG,OTCQB:GGGOF) in a AU$ 10-million deal.

As per the agreement, Doray will be paid AU$ 3-million in cash up-front, along with AU$ 1-million worth of Galane shares. Additionally, a further AU$ 3-million in cash will be payable 12 months after the execution of the agreement, with the balance of AU$ 3-million due 24 months after the agreement has been executed.

“Andy Well has been a terrific asset for Doray and its shareholders and a key reason Doray was the ASX’s best performing initial public offering of 2010. The successful discovery, start-up and operation of Andy Well delivered significant value to Doray,” said Leigh Junk, managing director of Doray.

Finally, South Africa’s Council for Scientific and Industrial Research (CSIR) is making the news for researching innovative hydrogen storage technologies with the potential to be key enablers of platinum-catalysed fuel cells, which would generate clean electricity using hydrogen as a fuel and platinum as the catalyst.

The research will target cost-effective hydrogen storage systems for fuel cell vehicles and portable applications. CSIR principal researcher and research leader Dr Henrietta Langmi, reported that a multifaceted approach to the development of viable hydrogen solutions is currently being adopted.

It’s a responsibility for us as a country to create demand for platinum. Let’s look into growth potential and investment potential and give young people opportunities,” stated Gwede Mantashe, mineral resources minister.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Wallbridge Mining Company and White Gold are clients of the Investing News Network. This article is not paid-for content.

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