Gold’s Fed Induced Rally Fades

Andy Parker
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Gold’s Fed Induced Rally Fades

Gold prices fell below the $1,230 level again, marking an end to the Fed induced-rally in the metal. Gold Futures for June delivery were trading 0.66% lower at $1,229.70 by the afternoon.

Short-lived surge

Federal Reserve Chair Janet Yellen’s dovish outlook on monetary tightening sparked a rally in the yellow metal, which is considered appealing at times of a dollar sell-off. Moreover, the pressure on bond yields favoured gold prices. But, according to Saxo Bank’s Ole Hansen who heads commodities research, the consolidation in gold could be prolonged. He backed the statement by highlighting the profit booking in the gold ETF that took place yesterday.

SPDR Gold Trust (ETF) (NYSEARCA:GLD), the world’s largest gold based exchange traded fund, witnessed its holdings decline by 3.3 tonnes. Meanwhile, HSBC noted that the good non-farm payrolls data could disrupt the gold prices.

Pershing closes private placement

In mining stocks, Pershing Gold Corp (NASDAQ:PGLC) notified shareholders that it had concluded a private placement with Donald Smith Value Fund, L.P. The private placement involved sales of 1,850,000 shares at a price of $3.25 per share. The offer fetched the company net proceeds of roughly $6 million. The company intends to utilise the accumulated proceeds towards funding its Relief Canyon project while the remaining funds will be used towards general corporate purposes.

Richmont Mines Inc. (USA) (NYSEMKT:RIC) released a statement informing that it has filed technical reports for its Island Gold and Beaufor Mines, which follows the company’s 2015 Reserves and Resources announcement.

IAMGOLD Corp (USA) (NYSE:IAG) has submitted a preliminary base shelf prospectus to securities regulators in Canada, except the Province of Quebec. The company has also filed the corresponding registration with the United States Securities and Exchange Commission. On acceptance, these filings will allow the company to offer common shares, debt securities, warrants, etc. up to a limit of $1 billion in Canada and the U.S. for a period of 25 months.