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Gold falls for fourth day as dollar stays firm ahead of Fed meeting

Comments (0) Actualites, Economy, US

(Reuters) – Gold prices extended losses into a fourth session on Monday and hit a more than two-week low, with the dollar remaining supported as investors expect the U.S. Federal Reserve to raise interest rates this week.

Spot gold was down 0.2 percent at $1,310.03 per ounce at 0735 GMT. Prices fell to $1,307.51 earlier in the session, their lowest since March 1.

U.S. gold futures for April delivery dropped 0.2 percent to $1,309.40 per ounce.

“I think the overall economic recovery is good enough for the (U.S.) central bank to consider a faster pace of normalization of monetary policies,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

A two-day Federal Open Market Committee (FOMC) meeting begins on Tuesday, with the U.S. central bank expected to hike interest rates for the first time this year.

“It is somehow expected and is already priced in the market so I stick to my prediction that precious metals, with gold included, are going to have range-bound trading, unless something really surprising happens,” said To.

With a 25 basis point rate hike seen as a done deal, one key focus is on whether Fed policy makers forecast four rate hikes this year instead of the three they had projected at December meeting.

Gold is highly sensitive to rising U.S. interest rates, becoming less attractive to investors as it does not bear interest.

The dollar inched higher against a basket of major peers on Monday as traders braced for the Fed meeting and as the increased threat of trade protectionism kept markets on edge. [USD/]

The dollar index was up 0.1 percent at 90.302. On Friday, it hit a two-week high near 90.38, following strong U.S. economic data.

“Potential market headwinds from the underlying (susceptibility) to risk-appetite, heightened (geo) political tensions, inflation concerns, Russia tensions, to name a few, could help keep the floor on gold prices in check,” Stephen Innes, APAC trading head at OANDA, said in a note.

Gold speculators cut their net long position by 16,153 contracts to 145,659 contracts, according to the U.S. Commodity Futures Trading Commission (CFTC) data. This was the smallest net long position since early January.

Among other precious metals, silver was down 0.3 percent at $16.26 per ounce and palladium inched 0.1 percent lower to $993.90 per ounce.

Platinum was 0.5 percent lower at $938.49 per ounce after falling to its lowest since Jan. 3 at $936.50.


(Reporting by Eileen Soreng in Bengaluru; editing by Joseph Radford and Subhranshu Sahu)


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Sibanye clears most illegal miners from gold shafts

Comments (0) Actualites, Africa, Business, Economy, Mining, Politics

JOHANNESBURG (Reuters) – Precious metals producer Sibanye-Stillwater arrested nearly 1,400 illegal miners at its South African gold shafts last year in a blitz the company says has mostly ended the practice at its mines.

Illegal gold mining has plagued South Africa for decades and it costs the government and the industry more than 20 billion rand ($1.7 billion) a year in lost sales, taxes and royalties, according to a Chamber of Mines report last year.

Sibanye Chief Executive Neal Froneman vowed last year to take the war to illegal miners and clear them from its shafts by January 2018 under the battle cry “Zero Zama”, after the Zulu term for illegal miners.

According to data provided to Reuters by Sibanye, it made 797 arrests in 2017 linked to illegal mining at its Cooke operations and 1,383 overall. The blitz peaked in June with more than 500 arrests, above the 443 arrests in 2016 as a whole.

While Sibanye fell short of its goal of stamping out illegal mining altogether, Sibanye’s head of security Nash Lutchman said based on available intelligence, “there are only about 40 to 50 illegal miners operating now, scattered across our Kloof and Driefontein operations”.

Froneman said last year the number of illegal miners in the company’s gold operations numbered “in the thousands”. Sibanye was the first South African gold miner to set itself a deadline to stop the practice.

Most zamas are undocumented immigrants from neighbouring countries who have long provided migrant labour for South Africa’s mines, but are now being laid off. The syndicates that support them and traffic the illegal metals are well-funded, well-established and highly dangerous, security experts say.



Sibanye’s drive was helped by the mothballing of its loss-making Cooke operation west of Johannesburg, which was the epicentre of illegal mining activity in its shafts.

Illegal miners gain access to working gold mines through bribery and other means, forcing companies to dispatch security teams to the shafts and to tighten entrance measures.

Sibanye spent 300 million rand last year and will spend another 300 million rand this year on access and biometric controls at the entry points to its gold mines.

“It still costs us so I don’t know if we will ever declare a victory but we are at the end of stage one,” Froneman told Reuters.

“My biggest concern about illegal mining is the corruption of our supervisors and our employees. That just sets a path for creating a rotten organisation. Everybody gets bribed and the integrity of the business just gets undermined,” he said.

Froneman admitted there was no guarantee illegal miners would not try to return, so the company needed to maintain its costly vigilance.

Security experts have said Sibanye would struggle to eradicate illegal mining completely but could reduce it by 90 percent.

Sibanye is the second South African gold producer to announce a milestone linked to illegal mining this month.

AngloGold Ashanti said it would spend up to $500 million to mechanise its Obuasi mine in Ghana.

The gold mine was rendered worthless when it was invaded by thousands of illegal miners. They were removed by the military last year and the South African company decided to revive the mine as an automated operation after a feasibility study.

($1 = 11.5400 rand)


(By Ed Stoddard;Editing by James Macharia and David Clarke)


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Gold falls slightly as dollar, equities gain ahead of Yellen testimony

Comments (0) Latest Updates from Reuters

By Nithin ThomasPrasad

BENGALURU (Reuters) – Gold edged lower on Tuesday on a firmer dollar and equities as the market awaited cues on the path of interest rate hikes in the United States ahead of Federal Reserve Chair Janet Yellen’s testimony on Wednesday.

The market was looking ahead to Wednesday and Thursday as Yellen will deliver two days of testimony on the U.S. central bank’s semi-annual report on monetary policy and the economy.

Based on the minutes of the last Federal Open Market Committee (FOMC) released on July 5, Yellen may testify that the Fed will seek to reduce the central bank’s Treasury bond holdings and mortgage-backed securities by August, effectively tightening the supply of U.S. dollars. The FOMC also indicated in the minutes that another interest rate hike would happen later this year.

Bullion is highly sensitive to rising rates because they push up bond yields, increasing the opportunity cost of holding non-interest bearing gold. A higher dollar, in which gold is priced, would also lower the value of the yellow metal.

“If the (Yellen) commentary is a little more hawkish, it’s going to put a little more pressure on gold again and going by previous FOMC minutes, it’s probably going to be,” said MKS PAMP analyst Tim Brown, adding “a lot of it has already been priced in.”

Spot gold was down 0.2 percent at $1,211.34 per ounce as of 0656 GMT. U.S. gold futures for August delivery fell 0.2 percent to $1,210.50 per ounce.

“The rising dollar and rise in (Treasury) yields will continue to mount pressure on the gold and silver in the near term,” MKS PAMP trader Alex Thorndike said in a note.

U.S. Treasury yields slipped on Monday, in line with weak European markets, as sharp gains following Friday’s strong U.S. non-farm payrolls report prompted investors to consolidate positions. After Friday’s jobs report, U.S. 10-year yields had hit an eight-week high of 2.398 percent.[US/]

Asian shares and the dollar were slightly higher on Tuesday. [USD/] [MKTS/GLOB]

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell 0.35 percent to 832.39 tonnes on Monday from 835.35 tonnes on Friday.

Spot gold is expected to rise into a range of between $1,225 and 1,231 per ounce, as suggested by its wave pattern and a Fibonacci projection analysis, according to Reuters technical analyst, Wang Tao.

Among other precious metals, silver fell 0.5 percent to $15.55 per ounce, while palladium rose 0.3 percent to $842.25 per ounce.

Platinum fell for a third day, down 0.8 percent at $892.35 per ounce. On Monday, prices fell to as low as $889.25, the lowest since May 4.


(Reporting by Nithin Prasad and Arpan Varghese in Bengaluru; Editing by Christian Schmollinger and Subhranshu Sahu)


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Gold eases off near 2-yr high, silver crosses $21/oz

Comments (0) Asia, Business, Latest Updates from Reuters

BENGALURU (Reuters) – Gold eased off a near two-year high, while silver breached the $21 level for the first time since July 2014 in highly volatile trade on Monday, prompted by a burst of short-covering in China.

Spot gold rose about 1 percent at one point to touch a session best of $1,357.60 per ounce. This was close to the $1,358.20 level reached on June 24, the highest since March 2014, when global markets went into a tailspin in the wake of Britain’s vote to exit the European Union. Spot gold was up 0.3 percent at $1,346.60 an ounce as of 0418 GMT. U.S. gold was up 0.7 percent at $1,348.50. Silver soared 7 percent at one point to $21.107, the highest since July 2014, before retreating below $20.25 by 0415 GMT.

“There is a little bit of a two-way battle going on in silver with a number of players going short in China,” said an analyst with an international investment bank.

The Shanghai Exchange Futures went limit-up as onshore players have aggressively been covering their short positions in the last few days, especially on Monday, said the analyst.

“Once the onshore market went limit-up, the short-covering buying spilled over to the London market.”

Chinese commodities from nickel to cotton surged on Monday on hopes Beijing would unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand. MKS trader Sam Laughlin said in a note global uncertainty would likely continue to fuel the recent rally in precious metals, but warned that there could be sharp periods of volatility. “The metal (silver) continues to be buoyed by its unique position as both an industrial metal in risk-on conditions and a safe-haven asset in times of uncertainty,” Laughlin added. Spot gold is expected to break a resistance at $1,351 per ounce and rise more to the next resistance at $1,367, said Reuters technical analyst Wang Tao. Hedge funds and money managers raised their bullish positions in COMEX gold and silver contracts to record highs in the week to June 28. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.41 percent to 953.91 tonnes on Friday, the highest since July 2013. [GOL/ETF] The U.S. markets are closed on Monday for the Independence Day holiday.


(By Vijaykumar Vedala. Reporting by Vijaykumar Vedala in Bengaluru; Editing by Joseph Radford and Subhranshu Sahu)

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South Africa’s AngloGold Ashanti posts free cash flow in Q1

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – AngloGold Ashanti Ltd posted a free cash flow in its first quarter compared with an outflow last year due to cost and debt cuts, Africa’s biggest bullion producer said on Monday.

“We generated significant free cash flow again despite the lower gold price, which shows the continued success of our self-help measures to reduce debt by improving margins,” said Srinivasan Venkatakrishnan, chief executive officer, AngloGold Ashanti.

The company, which has 17 mines in nine countries, said free cash flow in three months to March-end reached $70 million from an outflow of $40 million in the first quarter of 2015.

Adjusted gross profit edged up to $210 million at the end of March from $209 million in the same period last year.

AngloGold said it cut debt and costs during the quarter, resulting in cash flow, benefiting weaker local currencies against the dollar.

South African miners sell their commodities in dollars while paying costs in rand, boosting margins when the exchange rate weakens against the greenback.

Production in the quarter fell 7 percent to 861,000 ounces compared with the same period last year, due to planned reductions from Obuasi, Tropicana and Morila mines, and unplanned output drop in Kibali joint venture.


(Reporting by Zandi Shabalala; Editing by Sherry Jacob-Phillips)

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AngloGold swings to 2015 profit on weaker currencies, oil prices

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Africa’s top bullion producer AngloGold Ashanti Ltd on Monday said it swung into profit in 2015 as it benefited from lower oil prices and weaker currencies in the countries from which it exports gold.

Adjusted headline earnings, which exclude certain one-off items, were $49 million versus a year-earlier loss of $1 million.

“The results for the fourth quarter and full year 2015 show the combination of a strong ongoing focus on cost and capital discipline, as well as the operational leverage the company has to weaker currencies and lower oil prices,” AngloGold said.


(Reporting by Ed Stoddard)

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South Africa’s Harmony Gold pays off debt as weaker rand lifts revenue

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Harmony Gold has repaid debt of 1.1 billion rand ($78 million) after benefiting from South Africa’s weaker rand currency, the company said on Wednesday, sending its shares rising.

Harmony has repaid $50 million on a $250 million revolving credit facility and another 400 million on its 1.3 billion rand facility, the company said in a statement, adding that its mines were performing in line with the set targets.

The company generates more than 90 percent of its revenue in South Africa, but has plans to expand into Papua New Guinea, where it jointly owns the project to develop the massive Golpu deposit with Australia’s Newcrest.

“Our hard work of the last couple of years is finally paying off, enabling us to reduce our debt, strengthen our balance sheet and provide us with even more certainty that we can fund the Golpu project,” Harmony Chief Executive Graham Briggs.

Shares in Harmony climbed 7.38 percent to 9.46 rand by 1130 GMT following the news, compared to a 2 percent rise in the Johannesburg Securities Exchange’s Gold Mining Index.

($1 = 14.3360 rand)


(Reporting by TJ Strydom; Editing by James Macharia)


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Sibanye Gold says to conclude platinum acquisitions, shrugs off lower prices

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – Sibanye Gold said on Monday it remained committed to concluding the acquisition of two platinum assets despite lower prices as it awaited the approval of shareholders and South Africa’s anti-trust authorities.

The bullion producer said it expected a decision from the South African Competition Commission in March 2016 while shareholders are set to vote in January on the acquisition of Aquarius Platinum and Anglo American Platinum’s Rustenburg mine.

Platinum prices sank 16 percent in November to near seven-year lows on prospects of a U.S interest rate hike and ongoing concerns of oversupply. Despite this Sibanye said it would go ahead with the transactions.

“As highlighted when these transactions were announced, whilst near-term economic headwinds and supply side factors have resulted in downward pressure on metal prices, the long-term outlook for PGM demand remains constructive,” Chief Executive Neal Froneman said.


(Reporting by Zandi Shabalala; Editing by Himani Sarkar)

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Gold extends gains on geopolitical tensions but US rate view drags

Comments (0) Africa, Business, Latest Updates from Reuters

SINGAPORE (Reuters) – Gold added to overnight gains on Wednesday on a softer dollar and heightened tensions after Turkey shot down a Russian warplane, but the rally was capped on expectations of a U.S. rate hike next month.

Turkey shot down the Russian jet near the Syrian border on Tuesday, saying the plane had violated its air space, in one of the most serious publicly acknowledged clashes between a NATO member country and Russia for half a century.

U.S. President Barack Obama and French President Francois Hollande, meeting in Washington, urged against an escalation, while NATO Secretary-General Jens Stoltenberg said the military alliance stood in solidarity with Turkey.

The tensions triggered a sell-off in equities and the dollar, while boosting the safe-haven yen, gold and government debt.

Spot gold edged up 0.3 percent to $1,078.61 an ounce by 0645 GMT, following a 0.6 percent gain on Tuesday. U.S. gold rose 0.5 percent, after a near 1 percent gain in the previous session.

“Gold rose on flight-to-quality as investors sought protection from volatile financial markets in the wake of global stresses,” said HSBC analyst James Steel.

“While we think gold may be supported, we are not anticipating a robust rally, and look for only moderate gains, with a lot of upside resistance,” he said.

Despite the gains, gold wasn’t too far from a near-six-year low of $1,064.95 hit last week on increasing views that the Federal Reserve will hike U.S. rates next month for the first time in nearly a decade.

Gold tends to benefit from ultra-low U.S. rates, which lower the opportunity cost of holding non-yielding bullion.

Data on Tuesday supported views of a December rate hike. The U.S. economy grew at a healthier clip in the third quarter than initially thought.

Traders will be eyeing more U.S. data due later on Wednesday, including weekly jobless claims and October new home sales, to gauge the strength of the economy.

Liquidity, however, could be thin ahead of the U.S. Thanksgiving holiday on Thursday.

Among other precious metals, silver rose for a second session after dipping to a six-year low of $13.86 earlier this week, while platinum was trading just above a seven-year low.

Palladium rose nearly 1 percent to $540.65.


(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Subhranshu Sahu)

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South Africa’s Harmony Gold narrows quarterly loss, output rises

Comments (0) Africa, Business, Latest Updates from Reuters

JOHANNESBURG (Reuters) – South African bullion producer Harmony Gold on Thursday reported a smaller first quarter loss and said it aimed to wipe out its debt over the next two years.

Harmony said headline loss per share for the three months to end-September totalled 120 cents from a loss of 725 cents in the preceding quarter mainly due to benefits from restructuring and optimising efforts resulting in higher production.

The loss was mainly due to 14 percent weakening of the rand against the dollar in the period, the company said.

Gold production rose 10 percent to 281,385 ounces from 256,465 ounces in the previous quarter.

South Africa’s gold industry is being squeezed by falling prices and rising costs such as electricity and labour and companies are slashing costs to stay afloat.

By the end of September, Harmony had cash of 1.5 billion rand ($1078 million) and debt totalling $250 million.

Chief financial officer Frank Abbott told reporters on a conference call that the company intended to repay all its debt over the next two years before spending on its Golpu mine in Papua New Guinea intensified.

“The intention is to repay our debt over the next two years so when the bigger funding starts at Golpu we are sitting with a balance sheet without debt,” he said.

Harmony, which reaps about 90 percent of its gold from South Africa, expects to start a study on the second stage of development of its Golpu mine by December 2015.

Harmony said it expected the gold price to remain flat in the medium term but expected a long term recovery due to gold being used as an investment tool and store of value.

(Reporting by Zandi Shabalala; Editing by James Macharia, Reuters)

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