GOLD PRICE NEWS – The gold price traded near unchanged Wednesday, changing hands at $1,744 per ounce as investors and traders awaited news out of Greece. Greek Prime Minister Lucas Papademos is attempting to convince his fellow politicians to pass a series of austerity measures in order to secure a second aid package and prevent a disorderly default. Gold prices continue to consolidate under the $1,750 level as sovereign debt yields in Europe ease.
The gold price bounced back yesterday from an initial sell-off to finish the day higher by $25.00, or 1.5%, at $1,745.55 per ounce. The rebound in the price of gold was driven by weakness in the U.S. dollar, which turned sharply lower against the euro currency amid renewed hopes for a Greek rescue package. The euro reached a two-month high of 1.3269 against the greenback as euro zone officials neared an agreement for the next round of financial assistance to Greece.
Silver recovered from earlier losses alongside the gold price, climbing $0.54, or 1.6%, to $34.23 per ounce. Other precious metals headed north as well, with platinum jumping 1.5% to $1,654.80 per ounce and palladium advancing $3.20, or 0.5%, to $709.15 per ounce.
In contrast to the gold price, gold shares were unable to maintain their gains. The AMEX Gold Bugs Index (HUI), comprised of the world’s largest gold producers, finished lower by 0.5% at 538.11. Notable decliners included Agnico-Eagle Mines (AEM), Harmony Gold (HMY), and Randgold Resources (GOLD). AEM closed down by 1.3% at $36.14, HMY by 1.3% at $12.46, and GOLD by 2.9% at $114.60 per share.
With the gold price now higher by 11.6% on a year-to-date basis, on Tuesday, King World News interviewed one of the investment world’s foremost bulls on the gold sector – John Embry. As Chief Investment Strategist of Sprott Asset Management, Embry has been recommending gold-related positions since 2003. Yesterday, he was once again unequivocally positive on the prospects for higher gold prices.
“I think the price action to begin the year has been exemplary,” Embry stated. “Gold has risen the better part of $200 since the end of the year, that’s a lot in a short period of time. I still believe this is all just a precursor to what will be the finest year we’ve ever had in this bull market. The best up year, so far, in this gold bull was 36% and I would be surprised if that number were not obliterated this year. This will continue to be a very strong year for the precious metals and it will leave many market participants shocked.”
When asked about gold equities, Embry responded that “I believe once it (the HUI) stages a material breakout through that level (554), the 800 target I’ve been projecting could materialize very quickly. These stocks are very cheap and the ones that are the cheapest and most ludicrously priced are some of the smaller producers.”
As for his global economic outlook and the potential impact on the gold price, Embry noted that “The macro picture that is underlying all of this is the untenable debt situation throughout the world. Outside of China, if you break down the three major economies in the world, Japan, Europe and the United States, everyone of them has a debt situation there is no answer to other than to create more paper (money). That is the most positive environment possible for gold and silver. They are going to continue to debase all of the currencies in all of the Western economies to nothing. If you don’t own gold and silver I think you are making a terrible mistake in this environment.”
Platinum Group Metals Advances Toward Production
In August, Platinum Group Metals entered into a mandate letter with a consortium of financial institutions – including Barclays Capital and the Standard Bank of South Africa Limited – for a $260 million project finance loan to enhance the development of the Western Bushveld Joint Venture (WBJV) Project 1 Platinum Mine. The Company reported that the Preparation of detailed banking documents for the senior loan facility with the mandated syndicate of banks is ongoing. The completion of this documentation, due diligence, hedging establishment and off take negotiations are expected to be completed during Q1 and Q2 of calendar 2012. The formal mining right record of decision from the DMR is expected before the end of Q1 of calendar 2012. Full Platinum Group Metals News Release.
- In September 2011, the box cut excavation at the Project 1 Platinum Mine in South Africa was completed
- Also in September, a joint engineering study began on potential synergies with the Jinchuan-Wesizwe platinum mine adjacent to the Project 1 mine site
- In November 2011 Platinum Group Metals completed the formal public consultation process and documentation related to its Environmental Impact Assessment for the Project 1. Consultation with Government was subsequently completed in December
- In November 2011 the Company reported drill intercepts in a newly discovered extension of the North Limb grading 3.47 g/t Platinum, Palladium and Gold (2 PGE+Au) over 3.5 meters and 7.00 g/t 2PGE +Au over 5.0 meters at vertical depth of approximately 660 meters on the Waterberg project
