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.
Gerald Group resolves iron ore dispute with Sierra Leone
Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.
Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence.
As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.
Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.
Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.
Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."
Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.
"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.
Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is producing two million tonnes per annum of high grade iron ore in the first phase of development, with expansion possibilities of greater than six million tonnes per annum of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.
"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”