SPDR Gold Trust (ETF) (NYSEARCA:GLD) and corresponding gold prices booked a fifth straight weekly gain today at the expense of the U.S. Dollar (CURRENCY:USD). Brief optimism that pushed equity markets up this week receded after fears of a slowdown in China took over. Moreover, concerns surrounding economic and political uncertainty in Britain contributed to a diminished risk appetite.
China causes worry
Gold futures for August delivery surged 1.25% to $1,337.05 overnight. According to short term analysts, gold is likely to get support at $1,311.60 and resistance at $1,355.60 from here. The outlook for gold also improved after Bank of England Governor, Mark Carney, stated that more stimulus measures are on the way.
China serves as key driver for subdued sentiment towards risky assets. The Caixin manufacturing purchasing managers’ index slipped 48.6 in June from 49.2 in May, sparking concerns that the world’s second-largest economy is not turning around. In other metals, silver futures for September delivery also witnessed buying interest as it soared 3.47% to $19.273, breaking through long term resistance at $18.50.
Newmont sells stake in Indonesian mine
Meanwhile, Newmont Mining Corp (NYSE:NEM) announced its intention to sell its stake in an Indonesian mine. The Wall Street Journal reported that the company has entered into an agreement with local company PT Amman Mineral International to sell 48.5% of its stake in Batu Hijau copper and gold mine in Indonesia. This agreement is expected to fetch close to $1.3 billion for Newmont. The sale of the stake comes as a part of strategy execution by Newmont to lower its debt, enhance shareholder value and finance high margin projects.
Kinross Gold Corporation (NYSE:KGC) updated that it believes it can scale up mineral reserve estimates at both Bald Mountain and Round Mountain. Based on these views, the company has increased its 2016 exploration budget by 50% to $9 million for Bald Mountain. At the same time, the company has kickstarted the Process Solution Management heap leach program at Round Mountain.