Gold prices climbed almost US$30 per ounce Wednesday after plunging to a four-year low over
the weekend. The turn of events on the world market has heartened regulators, with Government yesterday urging miners to grab the opportunities to up production and declarations.
According to the Ministry of Natural Resources and the Environment, along with its regulatory agencies for the gold mining and trading business, it has noted that global gold prices are posting solid gains and hit a three-week high in early U.S. trading yesterday.
“A combination of heavy short covering in the futures market, bargain-hunting and safe-haven buying are boosting the yellow metal. The technical posture for gold has also become much less bearish this week. December Comex gold was last up $26.80 at $1,232.80 an ounce. Spot gold was last quoted up $11.30 at $1,233.25.”
Traders are still digesting the dovish Federal Reserve Open Market Committee (FOMC) minutes released Wednesday afternoon. The US Fed expressed increasing concern about weakening world economies and some FOMC members questioned whether the appreciation of the U.S. dollar against the other major currencies might act as a drag on the U.S. economy.
“The U.S. dollar index sold off, while the Euro currency, gold and U.S. Treasuries and stock indexes rallied in the aftermath of the FOMC minutes. The market place reckons the FOMC minutes hint the Fed may have to hold off longer on raising U.S. interest rates, given the increasing concerns about weakening world economies—especially the serious weakness coming out of the European Union,” the ministry said in a statement.
European stocks and bonds, and the Euro currency, rallied overnight, in the aftermath of the FOMC minutes and the U.S. stock market rally Wednesday afternoon. U.S. stock indexes were slightly higher in early electronic trading. The U.S. dollar index continued under selling pressure yesterday morning, which is also a bullish “outside market” factor for the precious metals.
“The local gold mining industry is being encouraged to capitalize on the rise in prices as we seek to close out the year on a high for the level of declaration that is currently being recoded,” the Ministry urged yesterday.
Gold was trading last Saturday as low as US$1,190 per ounce. The situation had worried the Government of Guyana in terms of the impact of the falling prices on mining operations and the economy. Miners themselves are worried because of loans and other debts they have incurred. Many of them had benefitted from the huge windfall from high prices but the crippling drop has caught them in a lurch.
According to Minister of Natural Resources and the Environment, Robert Persaud, as part of the continued mandate, his ministry and the regulators, Guyana Geology and Mines Commission (GGMC), have been meeting with the miners to determine the way forward. A number of measures have been proposed and are being studied.
The US$1,200 per ounce has been viewed by miners as one where deep worry would start. Miners have been warned to bring down production costs in order to remain profitable. Labour, fuel and food have been the biggest expenses for camp sites, with authorities urging miners to increase their recovery rates.
Last year, gold prices plunged from US$1,800 to around US$1,200 before inching up to the US$1,400 mark.
According to Minister Persaud, President Donald Ramotar will be briefed on the situation even as it is being assessed.
Last year’s gold declaration was the largest ever at 481,087 ounces. Gold export earning was a massive US$648M as at December 31, last. This year the target has been set for 484,562 ounces. The less-than-expected declarations to date were blamed on hoarding by miners and dealers who are hoping that the price climbs. However, this has been categorically denied by the operators.
Oct 16, 2018By Sean Devers in Trinidad In association with Regal, Vnet, Noble House Seafoods & Cascadia Hotel In murky conditions and played before virtually empty stands, Guyana Jaguars, led by a 79-run...
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