Gold futures rebounded Monday morning as risk aversion returned to financial markets following the latest disappointing U.S. economic report.
COMEX gold futures, per the December contract, recovered the large majority of their losses. The yellow metal climbed from as low as $1,612 to as high as $1,630.50 per ounce as of 10:19 am ET, erasing nearly all of its overnight decline.
The bounce in gold coincided with weakness in the broader U.S. equity markets. The Dow Jones Industrial Average (DJIA) rallied as much as 137.48 points near the market open, but tumbled into negative territory, by 48.63 points at 12,094.61.
The catalyst for gold’s rebound and the markets’ weakness was the worse than expected ISM Index for July, which at 50.9 came in far below the 54.0 consensus estimate among economists.
The Institute for Supply Management’s (ISM) Index is a key measure of U.S. manufacturing activity, with the 50 level the barrier between expansion and contraction.
The discouraging ISM number follows last Friday’s worse than expected GDP report, and will provide the Federal Reserve with further evidence to suggest that the U.S. economy is slowing considerably.
Premier Gold Mines Provides Mid-Year Update
- Premier Gold Mines recently announced its intention to acquire Goldstone Resources.
- New discoveries have been made at Hardrock including the recently identified Tenacity South horizon where drilling has confirmed high-grade mineralization up to 10.89 grams per tonne (g/t) gold across 10.0 meters including 45.40 g/t across 2.0m and 37.49 g/t across 2.1m.
- Drilling at the Rahill-Bonanza joint venture project in Red Lake continues to define high-grade gold mineralization within the "2E Horizon" with visible gold seen in recent down-plunge drilling.
- Drilling at the PQ North Project has intersected numerous gold-bearing shear zones in addition to mineralized iron formation units with alteration and mineralization similar to the nearby Musselwhite Gold Mine.
- The company has three drill rigs active at the Saddle Project in the Carlin Trend. Several holes have intersected significant mineralization and a results update will be provided in the coming weeks.
