Omega Gold Property located in prolific Kirkland Lake district
Recent Drill Results Include 24 Meters of 2.66g/t Gold in Open Pit Area
Message: Gold prices stimulated to five-month high
NEW YORK (MarketWatch)—Gold prices on Monday extended last week’s rise to a five-month high as investors increased their bets that the Federal Reserve would launch another round of monetary easing.
Gold futures for December delivery (US:GCZ2) rose $9.60, or 0.6%, to $1,697.20 an ounce in electronic trade on the New York Mercantile Exchange. Floor trading was closed for the Labor Day holiday.
Speaking to an annual symposium in Jackson Hole, Wyo., Fed Chairman Ben Bernanke on Friday reiterated the central bank stood ready to bolster the recovery with added policy accommodation. Gold rallied through two rounds of Fed monetary easing from late 2008 through June of last year.
The Fed Jackson Hole speech “ended up to be a confirmation of ‘staying the course’ to stimulus, which the market (for those who were trading) accepted,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, wrote in emailed research.
Increased cash printing by the Fed is seen as heightening the risk of inflation and drawing investors to gold, with the metal viewed as a hedge in the face of rising prices.
Speculators hiked net long positions in U.S. gold futures and options to a more-than-five-month high in the week ending Aug. 28, according to the U.S. Commodity Futures Trading Commission.
Potentially market-moving events ahead include a European Central Bank meeting Thursday and the U.S. non-farm payrolls report Friday. The following week brings a gathering of Fed policy makers and a German court ruling on the euro-area’s rescue fund.
On Saturday, China’s official gauge of manufacturing activity fell more than expected to 49.2 in August from 50.1 the month before, with a reading below 50 indicating the line cross to contraction from expansion. The report seen as furthering the case for Chinese policy steps to prop up growth.
Reports from South Africa had a strike by approximately 12,000 miners that began late Wednesday continuing at Gold Fields Ltd.’s (US:GFI) KDC mine in Johannesburg.
The precious metals producer said company officials were meeting with workers in an attempt to resolves demands for changes to local union leadership, Dow Jones reported.
The strike at the gold operation follows a series of walkouts that came after violent protests resulted in 44 deaths at the Lonmin PLC’s (UK:LMI) Marikana platinum mine, where a strike that started Aug. 10 continued.
Four people were shot and wounded at a Gold One International Ltd. mine in the east of Johannesburg Monday, after fired workers attacked back-at-work colleagues, the Agence France Presse, or AFP, reported.
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