Strengths
Gold trading in China’s largest physical exchange is accelerating. For the first ten months of 2014, the volume of contracts on the Shanghai Gold Exchange was 12,077 tonnes, compared with all of 2013 at 11,614 tonnes. Klondex Mines announced a second toll milling agreement this week for its Midas Mill, where it has spare capacity. Klondex will process high grade ore, in excess of 1.5 ounces per ton from and pay the provider the value of the recovered gold less all toll milling charges. Such deal structures are accretive to Klondex, which essentially is buying gold below the market price and processing it with a positive carry on the profit margin. NGEx Resources announced its maiden resource for its 100 percent owned Filo del Sol project on the Chile-Argentina border of 280.5 million tonnes of copper. With the associated gold content, the copper equivalent grade comes in at 0.66 percent. Many of the older copper discoveries in South America are being depleted and are becoming more arsenic rich. With the size of the alteration zone at Filo del Sol and with the resource drilling only testing a small part of it, NGEx expects that further drilling will grow the resource. Weaknesses
U. S. employment data released on Friday by the Bureau of Labor Statistics calculated the economy created 321,000 new jobs in November, 90,000 more than expectations and thus pushing gold below $1,200 for the close of trading this week. Interestingly, ADP’s Employment Change report released on Wednesday came in at just 208,000 which was a miss versus the consensus estimate of 222,000.
This post was published at GoldSeek on 8 December 2014.
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