Precious metals remained firmly in negative territory on Thursday afternoon amid widespread weakness in the commodities complex. COMEX gold futures settled lower by $16.30, or 0.9%, at $1,713.80 per ounce. Silver futures at the COMEX fared a bit better, finishing down by only $0.21, or 0.6%, at $32.67 per ounce.
Gold and silver shares underperformed the metals, as the Philadelphia Gold & Silver Index (XAU) retreated by 2.5% to 164.36. In doing so, the XAU stretched its loss thus far in November to 12.7% and reached its lowest level since August 31st.
A few of the worst performing XAU components on Thursday were Agnico-Eagle Mines (AEM), New Gold (NGD), and Silver Standard Resources (SSRI). Shares of AEM fell by 5.0% to $51.63, NGD by 4.5% to $9.66, and SSRI by 3.5% to $12.88.
(Rankings and analysis on every XAU component available at GoldAlert Pro – http://pro.goldalert.com)
Today’s decline in the price of gold was not accompanied by strength in the U.S. dollar, however. Instead, it was in large part driven by a report from the World Gold Council (WGC), according to Richard Hastings, a strategist at Global Hunter Securities.
In a note to clients, Hastings wrote that “A weak demand summary from the World Gold Council partly influenced by very tough year-over-year comparisons to the big runup in gold demand associated with the U.S. budget fiasco in August 2011” was the driving force behind the sell-off.
Specifically, the WGC disclosed that global demand for gold dropped by 11% to 1,084.6 tonnes in the third quarter of 2012 relative to the third quarter of last year. The report cited lower demand from China as well as a reduction in jewelry demand for the yellow metal.
On the positive side, however, the report noted that global investment in exchange-traded funds surged by 56% from the prior year period. Marcus Grubb – managing director, investment at the World Gold Council – commented that “It is clear from five-year rising demand trends that gold’s fundamental property as a vehicle for capital preservation continues to endure, as evidenced by this quarter’s increase in global ETF investment…and continued purchasing by central banks, the ultimate long-term investors.”
Among other precious metals, platinum futures dropped by 1.5% to $1,571.30 per ounce while palladium slid 1.6% to $634.15 per ounce. As for cyclical commodities, crude oil futures declined by 1.0% to $85.45 per barrel while copper bucked the trend to close up by 0.3% at $3.46 per pound.
Premier Gold Mines’ Royalty Expands High Quality Portfolio
Premier Gold Mines noted that the warrants are exercisable for up to 24 months from the closing date of the Royalty acquisition. Golden Arrow has the right, contingent upon 30 days' prior written notice, to require Premier Royalty to purchase for cancellation all outstanding warrants for a price of C$1.25 per warrant prior to their expiry. Full Premier Gold Mines Press Release.
- The Gualcamayo mine, located in the northern San Juan province of Argentina, is an open pit, heap leach gold mining operation with three substantial zones of gold mineralization
- It hosts total proven & probable mineral reserves of 2.2 million ounces and total measured & indicated mineral resources of 1.1 million ounces as of December 31, 2011
- Gualcamayo has consistently improved its production versus guidance since 2011
- According to Yamana Gold, the decision was made in 2010 to develop the underground QDD Lower West deposit, located below the main open pit, which is expected to lift annual production to more than 200,000 ounces per year beginning in 2014
