Gold Hovers Near Three Weak Lows Amidst Expectations Of An Early Rate Hike

Gold Hovers Near Three Weak Lows Amidst Expectations Of An Early Rate Hike

SPDR Gold Trust (ETF) (NYSEARCA:GLD) prices hovered near three-week lows as traders continue to reel under concerns of rate hike by the Federal Reserve by as early as June.

Hawkish comments adding woes

Gold for June delivery traded at $1,251.95, down by 0.08%. Speculations of an early rate hike grew strong after New York Federal Reserve President, William Dudley, asserted that the U.S. economy is prepared to embrace monetary tightening by June or July. These comments came after the minutes of the meeting of the Fed signaled hawkish tone of majority of Fed officials. Key economic data points such as firming employment and inflation will act as a catalyst for rate hikes.

Traders are likely to follow comments of a handful of Fed officials today. St. Louis Fed President, James Bullard, Philadelphia Fed President, Patrick Harker and San Francisco Fed President, John Williams will express their views on the U.S. economy. Increased possibility of rate hike negatively impacts gold prices, which are sensitive to U.S. rates.

Flow-Through deal completion

Seabridge Gold, Inc. (NYSE:SA) informed shareholders that it has concluded flow-through financing deal that includes full amount of the over-allotment option, for aggregate gross proceeds of $12,040,000. The company has sold nearly 500,000 flow-through common shares at the rate of $24.08 per share. The sale price reflects 30% premium over the stock’s price just before the announcement of this flow-through deal. The gross proceeds of this deal will be used to finance exploration programs in 2016 for a number of projects.

Meanwhile, Asanko Gold Inc (NYSEMKT:AKG) notified investors about the amendment in repayment schedule of its existing debt facility amounting to $150 million. Under the new arrangement, Asanko has deferred its principal repayments by two years to July 1, 2018. This revision will free up close to $70 million of cash flows for Asanko, which will be used towards development of planned growth projects.