Gold Steady After Touching Two-Week Lows

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SPDR Gold Trust (ETF) (NYSEARCA:GLD) retreated from lows after a weak Asian trade session today. However, any substantial upside is less likely. The yellow metal had breached the two-week lows overnight as the U.S. Dollar’s (CURRENCY:USD) rally grabbed investors’ attention.

Taking cues from USD

With the greenback still moving steadfast, it is anticipated that gold will hover at current or lower levels. Gold Futures for June delivery traded flat at $1,266.50. Gold is sensitive to the interest rate hike and the movement in the dollar.

Any hike in rates diminishes the opportunity cost of holding the asset. The prices of the gold have appreciated by around 20% so far this year alone as the Federal Reserve maintains its dovish outlook about the quantum of the rate hike this year. In other metals, Silver Futures for July delivery rose 0.06% to $17.100.

AngloGold optimistic about resolve

Apart from this, AngloGold Ashanti Limited (ADR) (NYSE:AU), one of the prominent gold miners, is maintaining optimism over the possible South Africa mining-Charter dispute. The Department of Mineral Resources released regulations last month that mandated 26% of black share ownership in mining companies.

The mining industry, represented by the Chamber of Mines, said that such regulation will result in dilution of its existing shareholders. Commenting on this development, Srinivasan Venkatkrishnan, CEO of the company, said that the companies should not be asked to follow double jeopardy. He is hopeful that there will soon be an agreement over the issue.

In other developments, IAMGOLD Corp (USA) (NYSE:IAG) announced the production of 191,000 ounces in the first quarter of 2016, which is 8.2% lower than the previous year’s production during the corresponding period. The fall in the production is mainly accredited to the lower grades at the company’s Westwood, Rosebel and Essakane mines. Meanwhile, its revenues too fell to 220 million Canadian Dollars in the first quarter owing to lower gold sales and prices.

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