Gold prices are cautiously up during late Asian trade as investors are looking forward to a speech from Federal Reserve Chair Janet Yellen later today. Hawkish comments from Fed officials in the recent past along with a similar indications disclosed in the Fed’s minutes continue to weight over the yellow metal’s outlook.
Gold exposed to rate hike risks
Gold Futures for June delivery on the Comex division advanced 0.14% to $1,222.15 after failing to retain gains yesterday. However, direction of economic growth data due today and Yellen’s comments will guide its momentum. Gold prices are highly sensitive to the U.S. rate outlook, which diminishes its appeal against high-yielding assets. Moreover, strengthening of the U.S. dollar (CURRENCY:USD) also makes gold vulnerable to fluctuations.
Renewed interest in gold
Meanwhile, a report from Bloomberg has highlighted the increased buying interest among billionaires for gold and companies that produce it. The report outlines that as much as $8.9 billion flowed into SPDR Gold Trust (ETF) (NYSEARCA:GLD) this year alone. Several fund managers including George Soros bought close to 78 million shares of Barrick Gold Corporation (NYSE:ABX) in the first quarter.
This report comes days after Goldman Sachs Group’s equity research team upped their outlook on Barrick and Newmont Mining Corp (NYSE:NEM). Goldman endorses the ability of these two gold miners to reap benefits from margin expansion.
Seabridge Gold, Inc. (NYSE:SA) revealed its exploration plans for its KSM project situated in the northwest region of British Columbia. As per the plans, the company will extend drilling by nearly 800 meters in the region. Seabridge looks forward to commence drilling by min-June. CEO Rudi Fronk said that extension of the drill area will help them to speed up the mining rate for higher grade material.
Separately, Kinross Gold Corporation (NYSE:KGC) informed that it is willing to re-negotiate with Tasiast mine unions over a new collective agreement. The union has already declared a strike at the mine, but, Kinross has confirmed that both production and Phase One expansion work remain uninterrupted.