SURVEY: Gold Prices Anticipated to Increase Next Week
Don’t call it a comeback.
Participants in a recent survey believe gold prices are positioned to make a comeback next week as prices are expected to rise. Out of 36 participants, 14 see gold prices going up, while six see the precious metal to decline and three believe prices will remain unchanged, according to the Kitco News Gold Survey.
Participants included bullion dealers, investment banks, future traders and technical chart analysts.
On Friday, Comex December gold was up about $15 an ounce for the week as a stronger dollar and rising open interest in the futures market continue. Gold has finally reached the all-important $1,200 an ounce level.
“Gold is back at $1,200, an important level for this year, partly due to the (Comex) option expiration on Monday,” said Frank Lesh, Broker and futures analyst with FuturePath Trading.
“Lower interest rates for the world’s largest consumer of physical gold (China) should certainly boost demand there and has supported gold for this move higher. (U.S.) dollar strength remains a problem for gold though and if the dollar holds current levels, gold will not be able to rally much more. I view gold as range bound and I am back to a neutral position. Gold is a great short-term trading vehicle right now. Not so much for long-term positioning.”
The price for gold is expected to rise ahead of the Nov. 30 Swiss gold referendum, where voters will begin deciding whether or not the Swiss National Bank needs to increase its gold holdings, among other requirements.
The referendum, if passed, will mean that The Swiss National Bank must hold 20 percent of all assets as gold, repatriate the 30 percent of their gold held abroad by England and Canada, and discontinue selling any gold they accumulate.
“I expect some apprehension from sellers and excitement from buyers in the lead-up to the Swiss referendum. No one will want to be short heading into the vote, even if the polls show a clear lead for the ‘no’ side,” said Adam Button, editor, analyst at Forexlive.com.
The positive momentum of gold comes after China announced a surprise rate cut and the European Central Bank started acquiring asset-backed securities to expand its program to stoke inflation and revive the bloc’s weak economy.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.